Quote of the Day
As far as the laws of mathematics refer to reality,
they are not certain,
and as far as they are certain,
they do not refer to reality.
Albert Einstein
Albert Einstein
The New Contract From America
The full text version is available here. Here's the summary of the final top 10 items (my votes are starred):
1. Protect the Constitution
2. Reject Cap & Trade
3. Demand a Balanced Budget *
4. Enact Fundamental Tax Reform *
5. Restore Fiscal Responsibility & Constitutionally Limited Government in Washington *
6. End Runaway Government Spending *
7. Defund, Repeal, & Replace Government-run Health Care *
8. Pass an ‘All-of-the-Above” Energy Policy *
9. Stop the Pork
10. Stop the Tax Hikes *
Seven out of 10 isn't bad. My alternate choices were: sunset regulations and enact fundamental regulatory reform; no more bailouts; stop career politicians & curb lobbyist power. I don't want to start a flame war with my Tea Party allies, but let me explain why I didn't select the three others specified above: I do believe in principle that we should not pass unconstitutional laws (the most obvious example being the recently passed Democratic Party Health Care Bill/Law; I have separately opined that I don't think it will be viewed as unconstitutional--this is based more on legal precedence that its conceptual merit); obviously I don't think that we should waste time writing laws that violate the Bill of Rights, but it's the function of the Judicial Branch of government to attest to a law's constitutionality.
Second, on cap-and-trade: I definitely would vote against a job-killing, inflationary energy tax bill that would reduce American carbons, especially if developing nations all but overwhelm our cuts with increases of their own. I think we should be aggressively building nuclear power plant replacements to meet or replace future power generation needs using fossil fuels, focus on building out infrastructure (power lines to urban centers) for wind and solar energy farms, electric vehicle charging stations and alternative fuels, etc., bar the purchase and registration renewals of fuel-inefficient used vehicles and institute progressive tax credits or subsidized loans for purchasing fuel-efficient vehicles, and provide accelerated write-offs or tax credits for clean coal technology. So why didn't I put cap-and-trade on my list? I don't think that that the same cap-and-trade bill which barely based the House has a chance in the Senate, and I think there are higher priority items.
Third, stop the pork. In my post, I have been a harsh critic of earmarks and government waste; make no mistake of where I stand on the immoral and fiscally irresponsible spending being passed on to future American generations. The issue I have here is that the spending tracked by worthy groups like Citizens Against Government Waste is fairly modest; projects like the Bridge to Nowhere makes for interesting news clips or 101 things named after Robert Byrd. One of the things that I dreaded about McCain's mixed debate performance against Obama is that I KNEW how Obama's progressive handlers were going to treat the issue: first, Obama would co-opt the issue by pointing out he stopped his own earmarks (conveniently right around the time he decided to run for President versus reelection to the Senate); he would make an empty promise to not signing future earmarks; second, he would then counterattack by pointing out that a few billion in earmarks is trivial compared to trillions in the annual federal budget, i.e., much ado about nothing. That's why in many posts I've been focused on items like zero-based budgeting, fixed-bid versus cost-plus contracts, streamlining and consolidating operations, flattening management levels, privatization, Six-Sigma, industry best practices, usability engineering, etc. I realize half my readers probably just fell asleep. Here's the point I'm trying to get across--government waste is like an iceberg; earmarks are like the tip of the iceberg, but the majority of waste is below the surface, and that's what excites policy wonks like Paul Ryan, Newt Gingrich, and myself.
Why did I think my 3 unlisted choices made more sense? First of all, regulation is an indirect tax. The government provides a mandate, say, Sarbanes-Oxley. I've done a lot of technical work with ERP application systems, and Sarbanes-Oxley functionality has been a significant factor in relevant upgrades. There is a cost-benefit to regulation. What I would like to see the Tea Party movement focus on is the equivalent of ecological impact studies of new regulation in the business environment: what's the economic cost impact of new regulations? If there is an industry failure requiring regulation, what government solution has the least impact to our global competitiveness? I would like to see the rule of law ideals applied to regulatory frameworks: limit the points of contact, identify regulatory priorities in terms of "must-have" versus "nice-to-have", and adopt a lean, consolidated, simpler, more responsive regulatory authority with clear bureaucratic responsibility and accountability. What I don't want is a growing federal bureaucracy of paper-pushers.
No more bailouts is self-evident: no moral hazard in terms of government providing a counterproductive safety net for businesses and their customers. Businesses that operate with proper risk management should be able to reap the results of their operations: the customer base of bad competitive management.
Dealing with tenure, whether we are talking about committee rotation (including leadership status) or number of terms of public office, is also a compelling change issue. I'm not optimistic that powerful legislators like Nancy Pelosi, Patrick Leahy, etc., would willingly cede the power and perks of seniority and decades of reelection from safe states or districts, but process reforms would certainly have an impact on how lobbyists would deal with ever-changing leadership. I think we need to go beyond restrictions on the Executive Branch; for instance, I don't see why we can't cap 12 years of service in each of the House or the Senate, or 12 year terms on the Supreme Court. To argue we need an 89-year-old Justice Stevens to serve indefinitely to accommodate an independence of his point of view at the expense of hundreds of well-qualified jurists is nothing short of an anachronism (as in most cases of academic freedom or teacher tenure). I suspect that we've already heard the best that a Robert Byrd and Joe Biden have to offer the people of their states, and the fact that a desperately ill Tim Johnson, Robert Byrd, and Ted Kennedy will stay on to the point of putting their political self-preservation over the rights of their states' people to be properly represented is unconscionable.
I have previously discussed derivatives in other posts, most notably this past Monday's. The Senate Agriculture Committee today passed a party-line vote in favor of Lincoln's (D-AR) heavy-handed derivatives proposal 13-8. Oh, by the way, expect the Democrats to try to spin the vote as "bipartisan" because it attracted one Republican senator (Grassley-IA); anyone who terms attracting 1 out of 9 votes as evidence of bipartisanship is putting lipstick on a pig.
There are a variety of reasons for opposing this bill; among other things, it creates winners and losers (e.g., commercial trading desks versus Wall Street and a double standard in terms of collateralization of transactions (which no doubt will be arbitraged)), it goes beyond the need for transparency through a clearinghouse, it decreases market liquidity, it's like squeezing a balloon, simply shifting speculation around the edges of the framework, and it may simply transfer risk from banks to an exchange mechanism, creating a moral hazard (and the possibility of a Fannie Mae-style failure of the exchange). The bottom line is that a regulatory system is only as good as its regulators, government regulators have not been very effective at their existing mandates, and we need all parties to think proactively and not reactively; Lincoln is not really solving the problem; she's simply giving it a makeover.
Senate Agriculture Committee Approves a Partisan Bill
on Derivatives: Thumbs Down
There are a variety of reasons for opposing this bill; among other things, it creates winners and losers (e.g., commercial trading desks versus Wall Street and a double standard in terms of collateralization of transactions (which no doubt will be arbitraged)), it goes beyond the need for transparency through a clearinghouse, it decreases market liquidity, it's like squeezing a balloon, simply shifting speculation around the edges of the framework, and it may simply transfer risk from banks to an exchange mechanism, creating a moral hazard (and the possibility of a Fannie Mae-style failure of the exchange). The bottom line is that a regulatory system is only as good as its regulators, government regulators have not been very effective at their existing mandates, and we need all parties to think proactively and not reactively; Lincoln is not really solving the problem; she's simply giving it a makeover.
Political Cartoon
What IBD cartoonist extraordinaire Michael Ramirez doesn't mention is America, like Iceland, has its own volcanoes. One of those is an unpublicized one on the top of Capitol Hill. Democrats feed the fire with tax dollars, the resulting smoke and mirrors cover the accounting for progressive legislation, and the lava progressively spews out, destroying all private property and leaving ashes of American dreams in its path, and the EPA has declared everything it touches a toxic moral hazard...
Musical Interlude: "Star" Songs
Louis Armstrong, "When You Wish Upon a Star"
Boy Meets Girl, "Waiting For a Star To Fall"
Earth, Wind and Fire, "Shining Star"
The Manhattans, "(You Are My) Shining Star"
