Government – Page 107 – artdiamondblog.com

In Whom Can You Trust?

“Russian President Medvedev, left, Czech Republic President Klaus, center, and U.S. President Obama, right, toast the treaty’s signing on Thursday.” Source of caption and photo: online version of the WSJ article cited below.

In the photo above, which of these three men would you want to sip champagne with? (Hint: the libertarian is in the middle.)

The photo accompanies this article:
JONATHAN WEISMAN. “Russia Sets Limits on Iran Sanctions.” The Wall Street Journal (Friday, APRIL 9, 2010): A8.
(Note: the online version of the article had the title “U.S., Russia Focus on Iran Sanctions.”)

Reid on Ben Nelson’s Cornhusker Kickback: “He Got This for Himself; He Wanted It”

(p. 5A) WASHINGTON — Senate Majority Leader Harry Reid this week defended the now-defunct Nebraska Medicaid exemption that was tucked into the Senate health care bill as Reid sought the support of Sen. Ben Nelson, D-Neb.

Nelson has said that he never asked for the exemption and that his goal all along was to provide relief for all states.
Tagged with the derisive moniker “Cornhusker kickback,” the arrangement quickly proved politically toxic.
. . .
Asked why he didn’t offer the same deal to every state from the start, Reid said, “Because I didn’t have it for everybody at that time. I thought I could get it as we moved along in the legislation, and I did.”
Van Susteren said: “You’re telling me that when Ben Nelson got that, when the two of you sat down together, you said, ‘Ben, we’ll do it this way. … Nebraska’s got it now, but after we get this passed we’re going to go for everybody?’ ” “No, no, no. He got this for himself. He wanted it,” Reid said.

For the full story, see:
JOSEPH MORTON. “Reid thought Nelson should boast of ‘kickback’; The Senate leader says it was a “terrific” Medicaid deal that all states now share.” Omaha World-Herald (Weds., April 7, 2010): 5A.
(Note: first ellipsis added; second ellipsis in original.)

FDR Cared About the Politics, But Not the Economics, of Social Security

(p. 116) Roosevelt’s social security plan created an array of problems. First, it retarded recovery from the Great Depression by contributing to unemployment. From 1937 to 1940. employers and employees were docked for social security, and that money was out of private hands and lying fallow in the treasury. Lloyd Peck of the Laundryowners National Association concluded, “The burden of this proposal for employers to carry, through a payroll tax, will act as a definite curb on business expansion, and will likely eliminate many businesses now on the verge of bankruptcy.”
. . .
(p. 117) When an accountant quizzed Roosevelt about the economic problems with social security, especially its tendency to create unemployment, he responded, “I guess you’re right on the economics, but those taxes were never a problem of economics. They are politics all the way through.” Roosevelt explained that “with those taxes in there, no damn politician can ever scrap my social security program. That’s why, as Roosevelt admitted, it’s “politics all the way through.” Most politicians, following Roosevelt’s lead, have taken delight in raising social security payouts and using that gift to plead for votes from the elderly at election time.

Source:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.
(Note: ellipsis added.)

Ben “Kickback” Nelson Seeks More Earmarks

Source of graph and photo: online version of the Omaha World-Herald article quoted and cited below.

(p. 1A) WASHINGTON — In the battle to secure federal earmarks for Nebraska, Sen. Ben Nelson is feeling lonely this year.

The Nebraska Democrat is seeking 51 earmarks worth $183.1 million. The four other members of the Nebraska congressional delegation, all Republicans, have submitted no requests this year, three of them agreeing to a House GOP moratorium.
That’s a big change from 2009, when Rep. Lee Terry requested 11 earmarks totaling more than $85 million, Rep. Jeff Fortenberry sought 28 earmarks totaling more than $75 million and Rep. Adrian Smith sought two earmarks totaling $1.2 million.
Sen. Mike Johanns has abstained from seeking earmarks since joining the Senate in 2009.
. . .
(p. 2A) Johanns has criticized earmarking as a method of directing taxpayer money based on lawmaker clout rather than a project’s merits. He said last week that the process would be better if lawmakers had to justify their individual earmarks at hearings.

For the full story, see:
JOSEPH MORTON . “Nelson stands alone on earmark requests; He is seeking $183 million for Nebraska projects while the state’s GOP lawmakers sit out this round.” Omaha World-Herald (Tues., May 18, 2010): 1A & 2A.
(Note: ellipsis added.)

After Health Care Plan, Are There Any Limits to What the Government Can Mandate?

(p. A10) As they constructed the requirement that Americans have health insurance, Democrats in Congress took pains to make their bill as constitutionally impregnable as possible.

But despite the health care law’s elaborate scaffolding, attorneys general and governors from 20 states, all but one of them Republicans, have now joined as confident litigants in a bid to topple its central pillar. In the process, they hope to present the Supreme Court with a landmark opportunity to define the limits of federal authority, perhaps for generations.
In the seven weeks since the legislation passed, at least a dozen lawsuits have been filed in federal courts to challenge it, according to the Justice Department. But the case that could carry the most weight, and may be on the fastest track in the most advantageous venue, is the one filed in Pensacola, Fla., by state officials, just minutes after President Obama signed the bill.
Some legal scholars, including some who normally lean to the left, believe the states have identified the law’s weak spot and devised a credible theory for eviscerating it.
The power of their argument lies in questioning whether Congress can regulate inactivity — in this case by levying a tax penalty on those who do not obtain health insurance. If so, they ask, what would theoretically prevent the government from mandating all manner of acts in the national interest, say regular exercise or buying an American car?
. . .
Jonathan Turley, who teaches at George Washington University Law School, said that if forced to bet, he would predict that the courts would uphold the health care law. But Mr. Turley said that the federal government’s case was far from open-and-shut, and that he found the arguments against the mandate compelling.
“There are few cases in the history of the court system that have a more significant assertion of authority by the government,” said Mr. Turley, a civil libertarian who acknowledged being strange bedfellows with the conservative theorists behind the lawsuit. “This case, more than any other, may give the court sticker shock in terms of its impact on federalism.”

For the full story, see:

KEVIN SACK. “Florida Suit Rated Best As Challenge to Care Law.” The New York Times (Tues., May 11, 2010): A10 & A11.
(Note: the online version of the article is dated May 10, 2010 and has the slightly different title “Florida Suit Poses a Challenge to Health Care Law.”)
(Note: ellipses added.)

“I Cannot Consent to Buy Votes with the People’s Money”

(p. 91) . . . Thomas Gore, . . . was first elected to the Senate in 1907, the year Oklahoma became a state. Gore had a populist streak in him, but he always recognized the protections to individual liberty that came from limited government. In the 1930s, therefore, he strongly opposed the federal government going into the relief business. Interestingly, Gore was made totally blind by two childhood accidents. He still managed to become a lawyer, and as a senator, he had to have family members or staff assistants read bills, books, and newspapers to him. Yet he claimed to see clearly through the political chicanery that would occur if the federal government entered the relief business. No depression, Gore argued, “can be ended by gifts, gratuities, doles, and alms handed out by the Federal Treasury and extorted from taxpayers that are bleeding at every pore.” On the issue of relief, especially, Gore argued that state and city officials “have immediate contact” with hardship cases and can best “superintend the dispensation of charity.” Soon after the ERA brought federal relief into existence, Gore said, “The day on which we began to make these loans by the Federal Government to States, counties, and cities was a more evil day in the history of the Republic than the day on which the Confederacy fired upon Fort Sumter.”

In 1935, Gore helped lead the charge in Congress against funding the WPA with $4.8 billion. After he spoke against the bill, thousands of people in southeast Oklahoma held a mass meeting to denounce Gore. They sent him a telegram demanding that he cast his vote for the WPA and, by implication, start bringing more fed-(p. 92)eral dollars into Oklahoma. Gore responded with a telegram of his own. Your action, he wrote, “shows how the dole spoils the soul. Your telegram intimates that your votes are for sale. Much as I value votes I am not in the market. I cannot consent to buy votes with the people’s money. I owe a debt to the taxpayer as well as to the unemployed.” Shortly after dictating these words, the blind Senator was led to the Senate floor to cast a lonely vote against the WPA.

Source:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.
(Note: ellipses added.)

Housing Crumbles Under Portugal’s Rent Control Laws

Stigler and Friedman’s only co-authored paper showed the flaws in rent controls. Although excellent, the paper apparently is seldom read in Portugal (or New York City).

(p. B3) LISBON — José Gago da Graça owns a Portuguese real estate company and has two identical apartments in the same building in the heart of Lisbon. One rents for €2,750 a month, the other for almost 40 times less, €75.

The discrepancy is a result of 100-year-old tenancy rules, which have frozen the rent of hundreds of thousands of tenants and protected them against eviction in Portugal. Mr. Gago da Graça has been in a lawsuit for a decade over the €75-a-month apartment, since his tenant died in 2000 and her son took over and refused to alter his mother’s contract, which dates to the 1960s.
“We’re the only country in Europe that doesn’t have a free housing market and that’s just amazing,” Mr. Gago da Graça said.
Rules like these, which economists also blame for contributing to Portugal’s private debt load, help explain why this nation of 11 million has followed Greece and Spain into investors’ line of fire.
. . .
The . . . rules helped protect tenants, but also led to a chronic shortage of rental housing. This, in turn, persuaded a new generation of Portuguese to tap recently into low interest rates and buy instead — often in new suburbs — thereby exacerbating the country’s mortgage debt and leaving Portugal with one of Europe’s lowest savings rates, of 7.5 percent.
“This system of controlled rents is a major problem for the Portuguese economy, but we will probably be waiting for a generational change to have room for institutional reform,” said Cristina Casalinho, chief economist of Banco BPI, a Portuguese bank. Beyond fueling housing credit, she added, the system “basically stops flexibility and mobility in the labor market because you can perhaps find a new job in another city but it will then be very difficult to rent a house there.”
. . .
“Nobody has had the political courage to change something like these rental laws and I don’t see the situation changing in the short term, even if I don’t think the Portuguese tend to react as dramatically as the Greeks,” said Salvador Posser, who runs a family-owned company renting out construction equipment.
Besides distorting pricing in the housing market, the tenancy rules have left physical scars. Portugal’s historic city centers are dotted with abandoned and crumbling houses that are either subject to a court dispute or have rental income that cannot cover repair and maintenance costs.
“This economic crisis is clearly keeping our very slow courts even more occupied because of the amount of conflict that it is creating between landlords and tenants,” said Menezes Leitão, a law professor and president of PLA, a property owners association.
Mr. Posser cited a recent estimate that 8 percent of the buildings in central Lisbon were deserted, in large part because of rent-related obstacles. In Porto, the second-largest city, less than 10 percent of inner-city housing is available for rent, which has helped shrink the population by a third over three decades.
“We’re still losing about 30 inhabitants a day,” said Rui Moreira, president of the Porto Commercial Association.

For the full story, see:
RAPHAEL MINDER. “Like Spain, Portugal Hopes to Make Cuts, but It Is Mired in Structural Weakness.” The New York Times (Fri., May 14, 2010): B3.
(Note: the online version of the article is dated May 13, 2010 and has the title “Portugal Follows Spain on Austerity Cuts.”)
(Note: ellipses added.)

The original source of the Friedman and Stigler article (in pamphlet form) was:
Friedman, Milton, and George J. Stigler. Roofs or Ceilings? The Current Housing Problem. Irvington-on-Hudson, New York: Foundation for Economic Education, 1946.

Under FDR, WPA Workers Were Coerced to Support Democrats

(p. 87) According to Lyle Dorsett, who has studied the Hague machine in detail, “Concrete evidence shows that from the outset of the New Deal, Frank Hague was in complete control of all patronage in the state.” And Roosevelt poured patronage into New Jersey in the form of massive public works (Hague owned a construction company), which included almost 100,000 WPA jobs annually during the 1930s and the highest rate of pay in the nation for these skilled jobs. One minor drawback to the high pay was that WPA workers in New Jersey had to “tithe” 3 percent of their salaries to the Democrat Party at election time. One WPA director in New Jersey–a corrupt but candid man–answered his office phone, “Democratic headquarters!”

Hopkins received mail regularly from people all over the nation who were denied federal jobs, or fired from them, because of their (p. 88) political views. Many of these letters are available in files for each state and housed in the National Archives. The title of these files is “WPA–Political Coercion.” The hefty New Jersey file is very illuminating. One WPA worker complained about a mass-mailed postcard he received that stated, “You are either on the WPA or employed in some government department and by virtue thereof you owe a duty to the [Democrat] Party to do your part in making the canvass. Failure to do your active share will be reported to our county chairman, and you may find your position in jeopardy.”

Source:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.
(Note: italics in original; ellipsis added.)

FDR Spent Other People’s Money Freely, But Was Stingy with His Own

(p. 75) . . . when Roosevelt was spending his own money, he was sometimes very stingy. For example, when Roosevelt traveled by train from Washington to Hyde Park, he always wanted a private car for himself and his staff: Servicing this private car, which might include providing dozens of meals, newspapers, and various amenities for the president and his staff would require great diligence and attention to detail. But for round-trip service on Roosevelt’s private car, he tipped the porter a mere five dollars. The reporters. on their car nearby, combined to tip eight to ten times more than the president did. Walter Trohan of the Chicago Tribune observed the unhappiness this created:

FDR wasn’t a heavy tipper at any time, but was less so aboard trains. He gave five dollars to the porter on his car for the round trip from Washington to Hyde Park, which included payment for what guests he might have in his car. In the press car we each gave two dollars for the trip, but there were about twenty of us all told. Sam [Mitchell, the porter] soon begged off the private car; the honor of serving the President faded for a man raising a family and sending a boy to college as well as paying for a home, when he could count on forty dollars in the press car as against five dollars in the private car.

Source:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.
(Note: italics in original; ellipsis added.)

Alert Street Vendor Hero Saves the Day

“Lance Orton, center, who sells T-shirts, said that as a veteran he was proud of his actions. But he spurned most questions.” Source of caption and photo: online version of the NYT article quoted and cited below.

Hernando de Soto has shown that entrepreneurial street-vending is an important path for the very poor to constructively improve their lives. And yet governments around the world, including ours, consistently make it hard for street vendors to ply their trade.
Yet, on balance, street vendors make our lives better, not only through their products and services, but also through their alert eyes that make our city streets safer. Jane Jacobs made the point that the presence of good people observing the streets is a key ingredient of urban safety, one that was too-often removed by well-intentioned, but ill-conceived city-planners’ urban-renewal projects.
The incident recounted below also adds one more case to the well-documented conclusions of Amanda Ripley, who showed us that our safety in avoiding and being rescued from disasters rests in the alertness, preparation, level-headedness and good will of ordinary citizens on the scene.
There may be professionals who are better trained, but outcomes often depend on what is done quickly, and usually only those who are on the scene are able to act quickly.
And although the politically correct will glower at you for mentioning it, there are obvious implications for the issue of gun control.

(p. A19) Even in Times Square, where little seems unusual, the Nissan Pathfinder parked just off Broadway on the south side of 45th Street — engine running, hazard lights flashing, driver nowhere to be found — looked suspicious to the sidewalk vendors who regularly work this area.

And it was the keen eyes of at least two of them — both disabled Vietnam War veterans who say they are accustomed to alerting local police officers to pickpockets and hustlers — that helped point the authorities to the Pathfinder, illegally and unusually parked next to their merchandise of inexpensive handbags and $2.99 “I Love NY” T-shirts.
Shortly before 6:30 p.m. on Saturday, the vendors — Lance Orton and Duane Jackson, who both served during the Vietnam War and now rely on special sidewalk vending privileges for disabled veterans — said they told nearby officers about the Pathfinder, which had begun filling with smoke and then emitted sparks and popping sounds.
. . .
But in a city hungry for heroes, the spotlight first turned to the vendors. Mr. Orton, a purveyor of T-shirts, ran from the limelight early Sunday morning as he spurned reporters’ questions while gathering his merchandise on a table near where the Pathfinder was parked.
When asked if he was proud of his actions, Mr. Orton, who said he had been selling on the street for about 20 years, replied: “Of course, man. I’m a veteran. What do you think?”
Mr. Jackson, on the other hand, embraced his newfound celebrity, receiving an endless line of people congratulating him while he sold cheap handbags, watches and pashmina scarves all day Sunday.
. . .
As for Mr. Orton, he rested on Sunday at a relative’s house, leaving others to talk on his behalf. “When he was in Vietnam, he said they had to make decisions and judgments from their gut, from their own feelings,” said Miriam Cintron, the mother of Mr. Orton’s son. “His instinct was telling him something’s not right. I guess he was right.”
She said Mr. Orton would mediate disputes between the police and other vendors, and when something did not look right, he would alert the police. “He always said, ‘Downtown is where they’re going to come to, and I’m going to be right there,’ ” Ms. Cintron said.
When Mr. Orton left Times Square about 7 a.m. on Sunday, he did so to a hero’s reception. As he walked down the street, employees from Junior’s restaurant stood outside applauding him. He briefly entered the restaurant before heading toward 44th Street.
Using a cane and wearing a white fedora, Mr. Orton limped away and hopped a cab home to the Bronx, but not before repeating a terror-watch mantra: “See something, say something.”

For the full story, see:
COREY KILGANNON and MICHAEL S. SCHMIDT. “Vendors Who Alerted Police Called Heroes.” The New York Times (Mon., May 3, 2010): A19.
(Note: ellipses added.)
(Note: the online version of the story is dated May 2, 2010 and has the title “Vendors Who Alerted Police Called Heroes.”)

The most relevant Hernando de Soto book is:
Soto, Hernando de. The Other Path: The Invisible Revolution in the Third World. New York: Basic Books, 1989.

The most relevant Jane Jacobs book is:
Jacobs, Jane. The Death and Life of Great American Cities. New York: Random House, 1961.

The Amanda Ripley book mentioned is:
Ripley, Amanda. The Unthinkable: Who Survives When Disaster Strikes – and Why. New York: Crown Publishers, 2008.

FDR’s Bad Bet on Aksarben

The “RA” mentioned in the passage quoted below, refers to FDR’s “Resettlement Administration” program.
“Aksarben” is much better known to Nebraskans today as a much-beloved, but now defunct, horse racing track in Omaha, than as Nebraska’s part in FDR’s government housing debacle.

(p. 69) With a staff of (p. 70) 13,000 and a mammoth $250 million to spend, Tugwell made plans for resettling thousands of tenants and marginal farmers into new model communities.

The result was a disaster. “It was all done awkwardly and wastefully,” Tugwell later confessed about the work of the RA. Even Roosevelt himself conceded, “I don’t think we have a leg to stand on,” when confronted with the high costs of the model towns Tugwell was building. Drawing model communities on paper was one thing, but it was another thing to relocate real tenant farmers into affordable houses far away in real towns with functioning services. One of Tugwell’s model communities was Arthurdale in West Virginia. A major problem there was that the ready-made houses could not fit their foundations. Once that problem was solved, the planners discovered that most residents, people from poor backgrounds, could not afford to live there. That protest became a common one in model communities all over the nation. Finding meaningful and profitable work for unskilled laborers was another recurring complaint.24
What that meant was that sometimes the RA had communities built, but no residents either willing or able to move in. An example of this was Ak-Sar-Ben (Nebraska spelled backward), a “dream city” of thirty-eight green-shuttered houses, each on seven acres of land twenty miles west of Omaha on the Platte River. The problem was that no one wanted to move in. Ak-Sar-Ben became deserted. Nearby farmer Henry C. Glissman observed this project and drew this conclusion: “I predict that in time these homes will all be abandoned and stand as a gruesome monument to a government’s inefficiency and folly in fostering a movement that to a practical mind has the earmarks of failure from the start.”

Source:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.
(Note: ellipses in original.)