Freedom Line Blog

After an erratic end to last week’s trading filled with ‘typos’ and frozen stocks, the Dow and markets all over the world are rallying on news that the European Central Bank will create a trillion dollar fund to buy government and private debt to keep lending liquid.  With the help of the IMF and the Euro-using nations, the fund will prop up troubled governments.

The response of surging stock markets does not mean this is a wise and sound policy.  Investors merely feel the momentary comfort that there will be enough stability in the short term for money to be made.  But this plan is little different from the $50 billion rainy day bailout fund batted around the debate for financial reform here in the United States, other than the sources of funding.

Such measures create perverse incentives for market actors, whether a country like Greece, or private firm like Goldman Sachs, saying, “Go ahead, and continue to take big risks.  Don’t worry about the consequences.  We’ve got your back.”  Why should Greece tackle its massive public sector union crisis?  Why wouldn’t Wall Street firms go out on a limb for a big potential gain, if there were a multi-billion dollar bailout fund to catch them if they fall?

Markets are all about incentives.  Rainy day bailout funds create the wrong incentive.

“Beware Greeks bearing gifts,” the Iliad-inspired saying goes.  Perhaps now we should amend it to add “especially those bought with on sovereign credit.”  Fresh off a visit to ground zero in Athens, Bill Frezza makes his contribution on how to handle Greece’s imploding debt crisis:

Throw Greece out of the European Union. Let them default on their debts. Teach buyers to beware before they invest in sovereign bonds. Dare Greece to print Drachmas by the wheelbarrow. Put the whole country on the public payroll then challenge them to demonstrate what a truly egalitarian society looks like. Maybe a dramatic spectacle of what a workers paradise looks like under the media’s glare will teach us what’s in store if we don’t change our ways.

Democracy is broken. You can’t mix Freedom and Free Lunch. One or the other has got to go.

Like the Trojans, it’s time for the Greeks to reap the consequences of some very poor decisions.

H/T: RealClearMarkets

Admit it; the headline isn’t impossible to believe.  It’s even less surprising to realize that all of the major criticisms of the Manchurian Candidate-turned-President – lacks relevant experience, a paper trail, or any notable accomplishment aside from self-promotion –are being lodged against his most recent Supreme Court nominee Elena Kagan.  Sure, as an Assistant White House Counsel, former Harvard Law dean, and Solicitor General she’s held some important positions.  But a light scrubbing of that parchment is revealing almost no key accomplishments with any of them.

After reading all of Kagan’s scholarly publications in two decades as an academic – three law review articles, two small essays, and two brief book reviews – law professor Paul Campos makes this observation about its quality in The Daily Beast:

At least in theory Kagan could compensate somewhat for the slenderness of her academic resume through the quality of her work. But if Kagan is a brilliant legal scholar, the evidence must be lurking somewhere other than in her publications. Kagan’s scholarly writings are lifeless, dull, and eminently forgettable. They are, on the whole, cautious academic exercises in the sort of banal on-the-other-handing whose prime virtue is that it’s unlikely to offend anyone in a position of power.

How Obama-esque.  Until, that is, ultimate power is achieved and the offending can begin in earnest.

Two weeks ago, in a commentary entitled Obama’s Big Fat Greek Bailout, we noted the alarming parallels between Greece’s meltdown and America’s trajectory.  Following years of unsustainable welfare-state spending, Greece’s deficit stands at 13% of gross domestic product (GDP), and its cumulative debt stands at 110% of GDP.  Unfortunately, America isn’t far off, with a deficit approaching 11% of GDP and cumulative debt under Obama heading toward 90% of GDP.

Well, other observers are beginning to draw the same parallel we did.  Robert Samuelson notes his commentary The Welfare State’s Death Spiral that “virtually every advanced nation, including the United States, faces the same prospect.”  Pat Buchanan echoes our observation in his commentary The End of La Dolce Vita:

For the nations of Europe have made commitments beyond their capacity to keep, given their growing debts and aging populations.  And America is not all that far behind.  While the federal deficit is not 14% of GDP, it was 10% in 2009 and may reach 11% in 2010.  Trillion-dollar deficits are projected through the decade, bringing the public debt – held by citizens, companies, foreign governments and sovereign wealth funds – close to 100% of GDP.  And the unfunded liabilities of Social Security, Medicare and federal pensions rival those of Western Europe.  States like California and New York, larger than Greece, look a lot like Greece.”

And today, we wake up to the news that Fannie Mae seeks yet another $8.4 billion federal lifeline.  Fannie was originally rescued by the federal government in September 2008, but at least that bailout was capped at $400 billion.  Last year, however, the Obama Administration agreed to remove even that limit, pledging unlimited loss coverage. Fannie’s total now stands at $83.6 billion, with Fannie Mae’s and Freddie Mac’s cumulative bailout costing American taxpayers $145 billion.

But just like Greece, whose original bailout estimate of $45 billion has now risen to $1 trillion, there is no end in sight for Fannie, Freddie or the United States.  Who knows how many more bailouts will be sought by Fannie and Freddie, not to mention other dysfunctional states like California and industries dominated by unions whose bosses are on Obama’s speed dial?

Can you hear the Greek wedding music growing louder?

Sports and politics have once again collided.  Responding to a protest of sorts by the NBA’s Phoenix Suns, Arizona Governor Jan Brewer penned a special to ESPN.com disputing misinformation about SB 1070.  The governor took the unusual step because of calls for boycotting Arizona-based sports events, among other venues.

Along with a few purple prose moments with sports metaphors, Brewer lays out the hard facts about the federal government’s failure to enforce immigration laws.  In 2009, there were 316 kidnappings in Phoenix, making it the nation’s kidnapping capitol.  Today, there are approximately 6,000 prisoners in Arizona who are foreign nationals costing state taxpayers roughly $150 million a year.

Getting back to the boycott issue, Governor Brewer makes an assertion no one can reasonable disagree with:

A boycott that would actually improve border security would be to boycott illegal drugs. Dramatically less drug use and production would do wonders for the safety of all our communities.

We’ll see how that goes over.

Apparently, President Obama’s penchant for dithering is contagious.  Solicitor General and potential Supreme Court nominee Elena Kagan has failed to respond to the Court’s request for a brief describing the Administration’s view on another Arizona immigration law.  (This one fines employers for hiring illegal immigrants.)  Now that the U.S. Chamber of Commerce is fast-tracking an appeal of the Grand Canyon State’s newest attempt to enforce federal law, Kagan very likely won’t be able to ignore taking a side.

Surprisingly, though, the former Dean of Harvard Law School has written or said scarcely anything about law in her two decades as a legal academic.  From the L.A. Times Supreme Court reporter David Savage:

She does not have a record as a judge or legal advocate, and she did not write widely on legal topics, potentially making it difficult for Republicans to oppose her if she is nominated.

Shouldn’t such a statement knock her out of contention?

So far, all we know about Kagan is that she has establishment Ivy League credentials, holds fashionable elite positions, knows the right people, and is a member of a favored Democratic minority group.  Apart from a vague reputation as a “consensus builder” at Harvard, she barely has a year under her belt as an appellate advocate.  Isn’t it a little early to promote her?

C’mon; it’s not like she’s running for President of the United States – this is important!

According to a book review she wrote back in 1995, Supreme Court short-lister Elena Kagan wants to judicial nominee hearings to get back to the good ole’ days of Robert Bork.  As reported by ABC News:

Kagan argues that the Bork hearing should be a “model” for all others, because even though it ended in the candidate’s rejection, the hearings presented an opportunity for the Senate and the nominee to engage on controversial issues and educate the public.

“The real ‘confirmation mess’ ” she wrote, “is the gap that has opened between the Bork hearings and all others.”

“Not since Bork,” she said, “has any nominee candidly discussed, or felt a need to discuss, his or her views and philosophy.”

“The debate focused not on trivialities,” she wrote, but on essentials: “the understanding of the Constitution that the nominee would carry with him to the Court.”

At bottom, Kagan called for an open, “educative” process that put differing constitutional philosophies under the microscope.  I’m all for it; so too are most conservatives.  It will be interesting to see if and when Kagan is nominated by President Barack Obama to fill the next vacancy if she still thinks that way when it’s her turn to defend her views.

After all, Bork was the last nominee to make it to the hearing room and not be confirmed.

If you’re looking for a pick-me-up amidst the travails of the Gulf oil disaster, Greek riots, and technologically crazed financial markets, check out Ted Nugent’s recent commentary praising the Tea Party movement.

This glorious experiment in self-government is not supposed to be a spectator sport as it has been reduced to for so long. As the boss of government, we the people were supposed to stay in touch with politics and politicians, making sure our will was the force behind policies and law making.

Remember that? The Tea Party Americans do, and we are demanding its return immediately. The New Deal was a raw deal and the Great Society was for losers. A hand out creates the curse of dependency. A hand up is nationalism at its finest.

This tribute to liberty is required reading for anyone in search of some good, rock-ribbed conservative truths told as only a Great American like Ted Nugent can.

H/T: Human Events

Only in Washington, D.C. does the title of this post make any sense.  When gauging the state of jobs in our country, most look to the figure produced by the Bureau of Labor Statistics referred to as “unemployment.”  That number rose last month from 9.7 to 9.9 percent.  Yet the economy added 290,000 non-farm jobs to payrolls.

Obama is upbeat about the numbers as 290,000 people who were not working last month are today.  The silver lining of the unemployment figure is the assumption that some people who gave up on job searching are back at it and thus are counted in the unemployment number again.

But there are plenty of reasons to be skeptical about any assertions the jobs market is rebounding.  Since Obama came into office, Washington has exploded with public sector jobs.  The most illusory job creator is the Census Bureau, which balloons every ten years with temporary positions to complete the national survey.  Of the jobs created last month, the Census created 66,000, building up to the expected 1.2 million temporary jobs at the Bureau, which will not exist next year.

Furthermore, the underemployment rate, which also includes the unemployed who have quit job searching or have taken part-time work because they can’t find a full-time position, continues to climb.   Underemployment has risen from 16.5 percent to 17.1 percent since the beginning of the year.

And Obama has the gall to keep telling us the stimulus, the emergency $787 billion porker that if passed would prevent unemployment from rising above 8 percent, is working.

Lost amidst reports of the attempted bombing of Times Square, the Greek economic implosion, the massive oil leak in the Gulf, the ricocheting stock market, and the British elections this week was a heart-wrenching story from America’s heartland: the city of Nashville is underwater.

After 14 inches of rain fell in only two days, at least 29 are dead in the Southeast and economic damage in Nashville alone is estimated to have easily reached at least $1 billion. Huge swaths of the city have been without water or power. And the mainstream media has yawned.

In the interest of full disclosure, I should mention that I spent half a decade living in Nashville and consider it be one of America’s slices of perfection. The city’s reaction to this tragedy — particularly in light of the scant press — has proven me right. As a good friend said to me in a message earlier this week, “everyone’s pulling together — it’s not New Orleans.”

A story in this morning’s USA Today drives the point home. How many other American cities could be expected to responed with this much grace and dignity?:

“The people who were flooded need somebody to watch their kids while they’re tearing their houses apart, and we have a lot of stay-at-home moms,” Chastity Mitchell says. Others are doing laundry for families that now need every item of clothing they own washed. Dinner on Tuesday was 60 chickens donated by the Publix grocery store.

 The view from Riverwalk includes a limestone bluff that rises hundreds of feet on the far side of the Harpeth, yet the rural feel is just a 15-minute drive from downtown. The neighborhood of $200,000-$400,000 homes celebrates its proximity to the Harpeth with street names such as Bending River and Wide Water. 

Mitchell says he has spoken with only one person who has flood insurance. He says the eligibility rules must be re-evaluated.

“You just don’t expect something like this,” he says. “There’s no villain. There’s no bad guy. Some of the parts of Bellevue that have been flooded, you’d never expect the little Harpeth River to do that.” 

He adds, “We really don’t have time right now to point fingers at anyone. It’s time to come together and help your neighbors and make sure your neighbors have food, shelter and clothing.”

Three cheers for Nashville. And a prayer for its people.

This week’s edition of the Liberty Update, CFIF’s weekly e-newsletter, is out.  Below is a summary of its contents:

Lee:  Democrats Exempt Big Labor Benefactors from Legislation Abridging Freedom of Speech
Ellis:  Who Is Kris Kobach and Why Should Proponents of Illegal Immigration Fear Him? 
Senik:  The Country – Not the GOP – is Moving to the Right
Groff:  The Government War on the American Diet

Freedom Minute Video:  Ten Lessons From the Age of Obama
Podcast:  Florida Attorney General on the Legal Battle Over Health Care Reform
Jester’s Courtroom:  Message in a Bottle: Don’t File Phony Lawsuits

Editorial Cartoons:  Latest Cartoons of Michael Ramirez
Quiz:  Question of the Week
Notable Quotes:  Quotes of the Week

If you are not already signed up to receive CFIF’s Liberty Update by e-mail, sign up here.

In an interview with CFIF, Florida Attorney General Bill McCollum discusses the lawsuit brought by at least 20 states challenging the constitutionality of ObamaCare and why the new law’s unprecedented mandates are an affront to individual freedom.

Listen to the interview here.

One-third of the way through the president’s term, CFIF’s Renee Giachino quips on ten lessons learned from the Age of Obama.

Watch this week’s Freedom Minute below.

From NBC in the Bay Area:

On any other day at Live Oak High School in Morgan Hill, Daniel Galli and his four friends would not even be noticed for wearing T-shirts with the American flag. But Cinco de Mayo is not any typical day especially on a campus with a large Mexican American student population.

Galli says he and his friends were sitting at a table during brunch break when the vice principal asked two of the boys to remove American flag bandannas that they wearing on their heads and for the others to turn their American flag T-shirts inside out. When they refused, the boys were ordered to go to the principal’s office.

“They said we could wear it on any other day,” Daniel Galli said, “but today is sensitive to Mexican-Americans because it’s supposed to be their holiday so we were not allowed to wear it today.”

Apart from the utterly fatuous political correctness, let’s put to rest the “its their holiday” canard. As is typical of the PC police, the heavies don’t even understand the sacred cow they’re protecting.

Despite widespread perception to the contrary, Cinco de Mayo is not Mexico’s independence day (that’s September 16 for those of you playing the home game), nor is it even particularly significant in Mexico. Rather it’s a commemoration of Mexico’s unlikely victory over France in the Battle of Puebla. The battle was part of a war that started because Mexico refused to pay its debt to international creditors. And before it was finished, the country had been defeated and seen its government taken over by a puppet emperor furnished by Napoleon III.

Not exactly sources of national pride. If only someone in California’s public schools had access to a history book …

Rep. Darrell Issa (R-CA) is continuing his one-man assault on government corruption by calling out the Treasury Department for helping GM lie its way back to respectability.  Apparently, GM paid off its debt to taxpayers with money from a government (i.e. taxpayer) escrow account and claimed it was free and clear.  When the Treasury Department parroted the nationalized car company’s line, Issa, the Ranking Republican on the House Oversight Committee, demanded proof.  What he got was a document from Treasury stating it “never” endorsed GM’s claim, accompanied by an attached press release headlined – no kidding – “GM REPAYS TREASURY LOAN IN FULL.”

You can’t make this stuff up.

H/T: The Daily Caller

But if you want a flavor of some immigration laws that are, check out this list put together by Foreign Policy.  In Italy illegal immigrants can get up to 6 months in jail.  Japan offers to pay Latin American immigrants of Japanese descent to go home.  And if a referendum passes later this year, Switzerland could start deporting entire families.  Suddenly, being asked for ID doesn’t sound so bad.

It looks like there will be more jobs next year as the American economy struggles free of the recession; it’s just that half of them won’t be full-time.  Or come with a retirement plan.  Or offer health coverage.  Or even sick days.  But hey; it’s work!

In a sobering report, Eve Tahmincioglu – herself an independent contractor – writes about the emergence of the “contingent workforce,” an umbrella term for freelancers, temps, and pay-for-project workers.  According to a study released by Littler Mendelson, a leading employment law firm, up to 50% of the new jobs in the next economy will be contract work.  The benefit to the company is payroll flexibility.  The benefit to the worker is a job, or more likely, multiple jobs for less pay than a full-time equivalent position.

A bit surprising is the projection that managers and professionals like engineers, scientists, and attorneys are joining the ranks of the temporarily employed.  So, what does all this mean for public policy?  Plenty.  With millions of workers on the hook for their own health care, retirement, and payroll taxes don’t be surprised if many of them default into “public options” like ObamaCare; especially if the government offers it at a lower price than the private sector.  Just what The One wants: more jobs, more dependency on government!

Earlier this week, I posted that Charlie Crist was in a lifeboat without a paddle.  Now he may have to return the lifeboat as well.  Crist currently has $7.6 million in his war chest, but RCP’s Brendan Farrington reports twenty major Republican donors have demanded he give it all back.  Their letter reads:

“For years you have been one of the Republican Party’s most outstanding and vocal leaders. But now, because of simple self-interest and political calculation, you are walking away from the people and principles that you often told us defined you ‘to your core.'”

Furthermore, they are not simply demanding the return of their own contributions, but those of supporters they brought to the table, writing,

“We helped to support, and yes to bankroll, your political career. For years you have been asking us for money. And for years we have put our names and credibility on the line by asking our friends to donate to you. Those days are over.”

In making his break from the GOP, Crist has repeatedly asserted his allegiances lie first with the people of Florida.  Those donors are people and each made contributions based on his candidacy for the Senate as a Republican.  Gov. Crist may not have a legal obligation to return a cent, but if he’s as committed to Floridians as he says he is, the public trust should compel him to reimburse anyone who feels betrayed.

Representative David Obey (D-WI), chairman of the House Appropriations Committee, announced Wednesday he will not seek reelection this November, leaving a well-worn seat occupied since 1969.  Mr. Obey is the most recent on a lengthy list of long-serving Democrats seeking to “begin a new and exciting chapter” of life, in the words of fellow retiree, Bart Stupak.   Surely this has nothing to do with the widely expected revolt against the party in power.

Still, Obey wants there to be no confusion:

“I’ve won 25 elections. Does anybody really think I don’t know how to win another one?  Or, for that matter, has anybody ever seen me walk away from a fight in my life?”

Even so, after four decades in office, bowing out on one’s own terms is a far more desirable option than being battered or possibly blown away in the storm that’s brewing for this fall election.  Sen. Chris Dodd saw the writing on the wall and accepted his “moment to step aside.”

Dodd, Obey and Stupak all took serious political hits in the last year and a half.  Dodd was at the helm of oversight on Wall Street when things went south.  Obey spearheaded the wildly unsuccessful $787 billion economic stimulus.  Stupak infamously caved during the final ObamaCare vote.  Each has made a career contributing to a legacy of spending that has our country on the brink of financial ruin.

Now, each rides off into the sunset.  Enjoy retirement, fellas.  Don’t worry about the mess.  Our grandchildren will pick it up.

What better way to celebrate the Iranian President’s visit to America than for Comedy Central to announce plans to develop a half-hour show about Jesus Christ “wanting to escape the shadow of his ‘powerful but apathetic father’ and live a regular life in New York City”?

As CFIF Senior Fellow Troy Senik pointed out last week, this is the same network that heavily censored a “South Park” episode lampooning the Prophet Mohammed for fear of offending radical jihadists.  When asked whether there was a double standard in making fun of the founder of Christianity, the network’s head of original programming says, “In general, comedy in purist form always makes some people uncomfortable.”

Good to see Comedy Central getting back to its roots: attacking the pillars of Western civilization while making a buck.