Following the Jimmy Carter example, yet again

Posted By Elgin Hushbeck

The No-Labels crowd is back with a major push, which is not too surprising.  The more Democrats and/or liberals reveal their true nature, thereby damaging their brand, the more they seek to avoid labels that would identify them for who they are.  Obama, Reid and Pelosi have really made a mess of things this time, leading to the greatest electoral defeat in decades.  Thus, the no labels crowd to the rescue.    But it may be too little too late.

More disturbing was the Democrats legislative strategy.  Knowing that they were going to have troubles at the polls, the Democrats simply ignored the law requiring Congress to create a budget, as a budget would reveal their spending priorities, causing them even more grief.   They also sat on many of their more controversial bills knowing that to push them would only further hurt their chances at the polls, with the intentions of cramming them through in the lame duck session where they would no longer be accountable.

There is something fundamentally wrong such a strategy as it makes a mockery of the notion of representative democracy.  Even my liberal friends were somewhat uncomfortable with this approach, but in the end they wrote it off with the claim that “both sides do it.”  But they don’t. 

Since 1940 there have been 18 lame duck sessions, many simply to tie up loose ends dealing with appropriations, or to keep the government running till the next Congress has time to get going.   Lame duck Congresses can be measured on two factors, the number of members changed, and the significance of the legislation passed.   Insignificant legislation, with little change in Congress, results in a pretty innocuous lame duck session, while significant legislation passed when Congress is changing hands, is highly undemocratic, and should be considered illegitimate.

Most lame duck sessions have been of the innocuous variety as normally there is not that much change in Congress, or where before the election, power was split between the parties and so there was little opportunity to cram through any significant legislation, though in the 1982 lame duck session, Congress did give itself a pay raise.  However, in 1980, 1994, 2006, and now 2010 the complete control of one party over the Senate, the House and the Presidency was lost by losing one or more of the three.   In 1980, 1994, 2010 Republicans broke up Democratic control, while in 2006, Republican control was broken by the Democrats.  

In the lame duck session following their losses in 2006, Republicans passed continuing resolutions to fund the government into February of the next year, thereby letting the new Congress have their say.   They also passed some minor tax benefit extensions and some trade legislation.  It also completed work on bills for the Postal service and Veterans Affairs, both passed in the Senate by unanimous consent and in the house by a voice vote.  Finally the Senate Confirmed Robert Gates as Secretary of Defense by a wide margin to replace Donald Rumsfeld, who resigned following the election.   In short, they did little, and nothing very controversial.

Much the same can be said for the Democrats following their loss in 1994, where they passed the General Agreement on Tariffs and Trade (GATT) a bill that had strong support but opponents had been delaying.  But things were vastly different in 1980. That year with the looming potential that the defeat of Jimmy Carter could drag down many Democratic Congressmen and Senators,  Democrats delayed “potentially difficult pre-election votes on budget matters”  and on “landmark environmental legislation”  till after the election.  Following the election rather than pass continuing resolutions (as Republicans would do in 2006) the democrats passed a number of appropriations bills. They also passed the Superfund bill, an Alaska lands bill, and several other measures.  

So when looking that the 2010 lame duck session, the simple fact is that both sides don’t do it.  In the closest historical parallel, Jimmy Carter’s loss in 1980, again it was the Democrats delaying votes and then pushing through major bills in the lame duck session.   When the Republicans did have a chance to do this following their loss in 2006, they passed very little of significance mostly by unrecorded votes that were not contested. 

To see why Democrats do this is easy. After all if you have already been rejected by votes, why not vote for a measure voters oppose. What else can they do to you?   And what better enticement to a politician who has just lost their job by being voted out, then the promise of a nice job if they vote the right way?  Another real problem in all of this is that in the effort to push through these measures debate, discussion and amendments are short-circuited, and legislatures end up as an all-or-nothing approach.   

The START Treaty is a prime example.  One of the major questions raised by opponents   goes to the heart of just what the treaty means, as the public comments from Russian and Administration officials are in conflict over its implications for anti-ballistic missile development. If both sides cannot agree on what the treaty says before it is even ratified, then what good is the treaty?  More importantly, just what is the Senate ratifying?   

To try and clarify this, critics asked to see the negotiating record so they could see exactly what was said and agreed to, as has been done in the pass, but the Administration refused to release it.   Given time, these matters could be worked out, but that would take a few months.  So instead it was just pushed through before we really know the impact it will really have.  This is probably why no other treaty has been ratified in a lame duck session.  Yet here, the national security of the United States has taken the Pelosi approach:  You have to ratify the treaty to see what is in it.   Frankly, the ratification of this treaty should be considered suspect.

In terms of a solution, we should probably give some serious consideration to the British system.  When politicians lose in Britain, they are out the very next day.  We should consider the same thing, at the least for the Senate and House.   This would take a new constitutional amendment, but it is one worth serious consideration.

Jan 3rd, 2011
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A Failure of Capitalism?

Posted By Elgin Hushbeck

There is still a lot of confusion over how the current financial crisis started and thus why we are in the mess that we are in.   Some argue that it is the failure of Capitalism.  Others argue that it was cause by government not doing enough, an absence of regulation.  There does seems to be a general agreement that it had something to do with the housing bubble, and many assume that it was Bush’s fault because he was in office at the time. 

While the former is correct, the latter is only partially correct, and both miss a very key aspect of the problem.  The subprime mortgage crisis following the collapses of the housing bubble was the initial cause of our current problems. Yet rather than the banks being too greedy, the housing bubble was caused by laws such as the Community Redevelopment Act, which literally forced banks to make loans that they had before considered too risky.  Unsound policies at government sponsored Fannie Mae, and Freddie Mac also played a major role in this.   Bush actually warned about these growing risks, and sought reforms that might have avoided, or at least lessened, the problem in 2003 and again in 2005. Both times Democrats were successfully able to block any reform.  Still, while the collapse of the housing market started the current problems, by itself, the recession that followed would probably have been a mild one.

The real missing piece to the puzzle is that on Nov 15, 2007 the US Financial Accounting Standards Board issue rule 157 which imposed Mark to Market (MTM) on companies as they started their fiscal year after that date.  MTM says that assets had to be valued at what they would be worth on the open market if you tried to sell them.  This is fine for assets that can be easily sold at any time such as gold, and it is normally not a problem for long term assets in a growing economy.  But in a downturn it can be a real problem.  There was a reason that FDR repealed MTM during the depression and its re-imposition beginning in late 2007 was a huge and very costly mistake.

Given the collapse of the housing bubble, as MTM was phased in nobody wanted to buy mortgage backed securities so they had to be valued at basically zero, even though they were long term assets and most people were still paying their mortgages. The bottom line was that companies that otherwise were doing ok had to post huge losses because of an accounting rule change. Even worse, companies which were required to keep certain levels of assets, because of MTM, suddenly found themselves short and scrabbling for loans to make up the difference. Yet given all the uncertainty, nobody wanted to make any loans.  The negative effects of MTM rippled through the economy all through 2008 as more and more companies began their fiscal years.  By Sept, 10 months into MTM, a real crisis was developing.

This is when the government did step in with Toxic Asset Relief Program (TARP), but TARP was at best a bandage for the symptom and did not actually address the real problem.  Therefore, not only did it not work, it only made things worse. The economy plunged deeper and deeper.   It did not cease its slide until March 2009, virtually to the day that it was announced that MTM was being repealed yet again.  The short experiment with MTM lasted 17 months, but did trillions of dollars in damage to the economy.

Once it was repealed, many of the institutions that needed bailouts, suddenly recovered and were able to pay back their loans. While the core problem was fixed at that point, and markets did bounce back a bit, by then the economy had been so damaged and burdened down by all the “Fixes” that the government had tired,  TARP, the bailouts, the Stimulus, etc, that it continued to struggle.  It is rippling effects of the now repealed MTM,  government’s ‘fixes’ and the ‘fixes’ to the ‘fixes’ along with the uncertainly caused by the Obama administration’s policies, such as Obama care and increased regulations,  which are what are harming us now.

So, bottom line, this was from start to finish a crisis of government’s making. It was not a failure of capitalism, or a lack of government regulation. If fact it was the opposite.  Government regulations distorted the housing market causing the housing bubble in the first place.  MTM then threatened to turn a problem in to disaster.  Finally when Government tried to fix things, they did not address the root problem and in fact only made things worse.   So it was not a failure of capitalism, but a smothering of capitalism that has caused the current problem. This solution is a return to capitalism.

(A more complete discussion of this can be found in Preserving Democracy pg 245-263, particularly 255-263.) 

Dec 12th, 2010
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Gate-Rape vs the Fourth Amendment

Posted By Elgin Hushbeck

We were “lucky” enough to have taken a vacation around the first of the month.  Thus we left before the new pat downs but flew back with them.  I had no problem, but an elderly woman with us who is phobic about touching to begin with (think of the TV detective Monk) had a hip replacement and pins in some of her fingers because of arthritis.  She is still having nightmares several weeks later and will probably never fly again.  What kind of country do we live in where the government can do this to a person, simply because they wanted to take a vacation?

Some think the aggressive and invasive pat-downs are just to break down people’s resistance to what have come to be called the naked scanners. If they are then that is in and of itself a pretty scary thought – that the government would subject its citizens to such searches in order to break down their resistance to something they oppose.   Others say that they have no problem with scanners and that they should just drop the pat downs and use the scanners. 

But I do have a problem with the naked scanners, and not because I am modest, or think the TSA controls are weak.  Remember these are just version 1. Think very early Black and White TV. Like all technology, if used they will be improved in years to come.  If these scanner are allowed here, in a few decades we will have the full color HDTV versions which will also be much cheaper and thus will spread to more places.

After all, terrorists have already begun to target less hardened locations than airports.  Thus it is not at all hard to imagine a few years from now that you will need to subject yourself to a virtual strip search to go to a ball game, travel a subway, or even to shop at a mall. What does the 4th amendment mean in such a world?  Becoming a police state in order to avoid the imposition of Sharia law is not a good trade off.

And they still will not be 100% effective.  Terrorists have already placed bombs in body cavities. So what is next?  Beep and you get a full cavity search?  What about surgically implanted bombs? The bottom line is that terrorists can always be better at hiding weapons than we are at finding them. This is because we are always looking for the last hiding place, not the next one.  

Perhaps one of the most despicable statements has been that if you do not want to submit to the new pat downs or virtual strip searches, then don’t fly. This is basically if you want to keep your 4th amendment rights, then you can’t exercise your freedom to travel.  Whatever happened to living in a free country?

And what happens when these scanners are installed in government buildings as they certainly will be.  What happens when they are in a court house, and you are summoned for jury duty? Can you just not go?  Then there is the issue of safety. It is far safer to fly than to drive, so as more people choose to drive more people will be killed in auto accidents.  Thus it is very likely that the new security measures, rather than saving lives, will result in more deaths.

Dec 3rd, 2010
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Why Obama Failed

Posted By Elgin Hushbeck

There was a lot of discussion over, and distortion of, Rush Limbaugh’s statement at the beginning of President Obama’s term that “I hope he fails.”   Fast forward to today and it is hard to find anything that is going right.

The economy is trying to bounce back but is weighted down by so much uncertainty about what Washington is doing, going to do,  and in some cases has already done, (e.g. health care) that it can’t do more than sputter.  Unemployment is still near 10 percent and would be even worse except for those that have given up.   Deficits have risen to heretofore unimaginable heights.   Last year this was explained away as TARP and the various stimulus plans, but this year’s deficit is even larger without them.

With a whole slew of tax increases slated to kick in (the new tax on tanning salons just took effect this month) the economist Arthur Laffer wrote in the Wall Street Journal that a lot of the growth we see now is from economic activity moved forward in an attempt to avoid next year’s tax increases.  Laffer predicts that next year “the train goes off the tracks and we get our worst nightmare of a severe ‘double dip’ recession.”   

Then there is the Obama administration’s handling of the oil spill that makes the Bush administration’s handling of Katrina look to be a model of speed and efficiency.   On the foreign policy front, foreign leaders might like Obama because he bows to them both literally and metaphorically, but we are hardly more respected, nor is the world a safer place.

While major media, his stalwart defenders,  are valiantly attempting to present things in the best light and deflect all criticism, there have even been a few cracks in their ranks.

Everywhere you look things are bad and getting worse.  While finger pointing at Bush remains a major component of Obama speeches, as the months tick by, it becomes less and less effective.  Blame may be of supreme importance in Washington, but in the rest of the country people just want the problems fixed.

So what went wrong?  Hugh Hewitt thinks that it has to do with:  “oiiohh” or “Obama Is In Over His Head.”  There is a lot of truth in that.  One of the things the country is learning from the Obama presidency is that having chief executive experience does in fact matter.  The presidency is more than meetings, breakout sessions, and speeches.   With all the left’s attacks on Sarah Palin, the simple fact is that, as a successful governor, she had more experience than Obama.  Obama was really nothing more than a state senator and community organizer who, because of a botched campaign where his opponent had to drop out, got to the United States Senate.  Once there, he almost immediately began running for president.  His lack of experience is a factor and he does at times seem in over his head. But I think there is a deeper problem.

One of my various jobs while working my way through school was as a bank alarm installer and on one job I was part of a team changing the alarm system of a major Los Angeles bank.  Not only was it a major bank, this was the first time this new alarm system was being installed so things had to go right. But they didn’t.  The new system did not work.

For a couple of days my team leader spent hours on the phone with the engineers trying to get the new system to work, but to no avail. Since we had had to rip out all the old cabling to put in the new alarm, going back the old system was not an option. The bank was getting upset, and the head office pressing us to “just make it work.”

Since the bank alarm was somewhat similar to something I had worked on in the Air Force, I asked my lead if I could take a look at the schematics.  In about two hours I found the problem.  They had been checking, rechecking, and then checking again to make sure they followed the schematics, but the schematics were wrong.   Once we confirmed this with the engineers, we rewired the alarm to the corrected schematics and it worked perfectly.

The problem we had at that bank is similar to Obama’s problem. His schematic of how the country works is wrong.   During the campaign his supporters in the media told us not to pay attention to his past or those around him, but we should have. After all, no one spends twenty years in a church with a pastor like Jeremiah Wright unless there is some agreement there.

Obama’s schematic, or “blueprints” for the country have been formed by his life experience and the elite schools he attended,   influenced by the writing of radicals like Saul Alinsky,  focused by his work as a community organizer, and then seasoned by his friends such Pastor Wright and Bill Ayers, the sixties radical who bombed the Pentagon.   In short, his blueprint for the country is wrong.  The more he tries to “fix” the country using those blueprints, the more he will fail and the worse things will get.

While it is theoretically possible for Obama to realize his blueprint is wrong, even in normal circumstances this is very difficult.  For Obama it is virtually impossible,  for no other reason than that his blueprint is supported and reinforced by many others in his party and in the media.  Psychologically it is much easier for them to simply blame Bush than to confront their own failings.

The only real solution is to stop the bleeding by changing control of at least the House of Representatives in November.  If we add to this control of the Senate, then some minor corrections can be made.  But any real solution will have to wait until 2013 when a new president, one with correct blueprints, can take office.

Jul 5th, 2010

A Review of Preserving Democracy

Posted By Elgin Hushbeck

It will open your eyes and quicken your heartbeat…I am learning things that make my jaw drop.

Entire Review

Jul 4th, 2010
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