Don't Let the Bureaucrats Bite

Cause:

Bedbugs, a common household pest for centuries, all but vanished in the 1940s and '50s with the widespread use of DDT. But DDT was banned in 1972 as too toxic to wildlife, especially birds. Since then, the bugs have developed resistance to chemicals that replaced DDT.

Also, exterminators have fewer weapons in their arsenal than they did just a few years ago because of a 1996 Clinton-era law that requires older pesticides to be re-evaluated based on more stringent health standards. The re-evaluations led to the restrictions on propoxur and other pesticides.

Effect:

Bedbugs, infesting U.S. households on a scale unseen in more than a half-century, have become largely resistant to common pesticides. As a result, some homeowners and exterminators are turning to more hazardous chemicals that can harm the central nervous system, irritate the skin and eyes or even cause cancer. ...

... authorities around the country have blamed house fires on people misusing all sorts of highly flammable garden and lawn chemicals to fight bedbugs. Experts also warn that some hardware products — bug bombs, cedar oil and other natural oils — claim to be lethal but merely cause the bugs to scatter out of sight and hide in cracks in walls and floors.

The government transformation of supposedly too-popular station wagons into too-popular SUVs comes to mind.

Now will come the public cry for widespread use of DDT, where limited, judicious use might have prevented the problem in the first place.

The People of Central Falls Should Fire Their Receiver

... only they can't, because the people who govern Rhode Island have decided that bond ratings justify a sort of economic martial law. They simply don't believe that democracy works. So, bond rating agencies' threat to devalue Rhode Island's ability to borrow more money (which it shouldn't be doing, anyway) has given a single man, retired judge Mark Pfeiffer, the right to do this without recourse for those subject to his dictats:

City taxpayers can expect a 10-percent property tax increase and higher taxes on the cars they own as the receiver appointed to reorganize the city’s troubled finances tries to close a $2.1-million deficit in last year’s city budget and a $6.3-million hole in the current one, the state receiver running the city’s finances announced Wednesday.

Anyone inclined to object that Central Falls is already at its 4.5% tax cap needn't worry, because:

The 10-percent supplemental bill is legal, Pfeiffer said, because the taxation cap legislation allows a municipality to exceed it if the governing council votes to ask the state for permission and if the state allows it.

Pfeiffer said the receivership state law gives him the power to act as the council, and he would do that when he asks the state Division of Municipal Finance to approve the increase.

Of course, the tax cap law — naively presuming that a "governing body" isn't a single man — requires a 4/5 vote of that body. Such is the distortion of language that one gets when the rules are suspended.

That suspension of rules, by the way, seems conspicuously to benefit a particular group. Note this tidbit from a sidebar to the current story:

[Judicially appointed receiver Jonathan] Savage was appointed May 19 after the city went to court for the state-law version of federal bankruptcy. Savage was replaced July 16 after a new state law put municipal receiverships under the Department of Revenue. [Spokesman Bill] Fischer said that was a mistake because under the old system Savage could have imposed new contracts on the city’s unions. The new law forbids that.

[Gubernatorial Spokeswoman Amy] Kempe disputed that, saying the law wasn't clear and had Savage tried to change contracts, it would have led to a months-long court battle.

So, before, Savage could have addressed unreasonable expenditures on and promises to labor — much like East Providence's School Committee did — and taken the likelihood of a lawsuit into consideration. The actions of the state government, however, have taken that off the table, so it's an historic tax increase without representation one of the poorest communities in Rhode Island at the behest of a very well paid dictator.

Integral Government Strings

Upon reading of the $9.4 million or so in federal money coming to Rhode Island for the purpose of expanding charter schools, I couldn't help but wonder about the strings that must be attached even to such a piddling sum, by current government standards.

Reviewing the U.S. Dept. of Education's onlne materials related to the program, I couldn't find any explicit strings, though. That leaves a cynic like me with general complaints about big government. Charter schools are popular among Americans, and by offering even a little bit of money toward their growth, the feds begin to insinuate themselves into their operation. (Specific office holders may also be interested in purchasing some cover for the billions of dollars that they've been devoting to preventing local school districts' having to reform in ways, during this recession, that might affect unionized labor.)

It's probable that many people involved in such initiatives, right up to Secretary of Education Arne Duncan and the president himself, honestly wish to improve public education and see charter schools as a mechanism for that purpose. Politicians and bureaucrats are no doubt sincere in their good intentions for a great number of big government programs. What they have to learn, though, is that good intentions are only as valuable as the individuals who hold them, and centralizing American life will ultimately give power to people more intent on exploitation.

The Government's Business Model

It's quite model the U.S. government has created for itself, as an entity, and the Democrats have made its principles undeniably clear with their ownership of power:

Spending more on border security commands bipartisan support, but the jobs bill, which narrowly passed the Senate, is being described in starkly different political terms. Democrats say it could save the jobs of more than 300,000 teachers, police officers and other public health workers. Republicans see it as more profligate government spending and a pre-election gift to teachers' unions and other public service unions that are crucial to helping keep Democrats in the majority.

The legislation provides $10 billion to school districts to rehire laid-off teachers or ensure that more teachers won't be let go before the new school year begins. The money could keep more than 160,000 teachers, including 16,000 in California and 14,000 in Texas, on the job, advocates say.

The other half of the bill has $16 billion for six more months of increased Medicaid payments to the states. That would free up money for states to meet other budget priorities, including keeping more than 150,000 police officers and other public workers on the payroll. Some three-fifths of states have already factored in the federal money in drawing up their budgets for the current fiscal year.

With all tiers of government unable to operate in ways that maintain their workforces — and reluctant to trim unnecessary labor — the feds are simply borrowing money against the livelihoods of future taxpayers to fill the gap. They're taking money from the private sector to insulate their own employees against the combination of mismanagement and hard economic times. Conveniently, since government employees can vote for their employers, the larger government gets, the greater its directly bought and paid voting bloc becomes.

This is what way-too-big government looks like, and the trend must be reversed.

Is It ObamaCare or a Maze?

If this survives its legal challenges and becomes our national healthcare system, perhaps they'll give us breadcrumbs or string to navigate. By the way, kudos to 71% of Missouri voters for boldly (but possibly non-bindingly) turning thumbs down on this idea Tuesday.

[Compiled by Republicans on the Congressional Joint Economic Committee.]

Different Escalators to and from Sanity

Did you happen to catch this in the New York Times, last week?

Even as the new coalition government [of Great Britain] said it would make enormous cuts in the public sector, it initially promised to leave health care alone. But in one of its most surprising moves so far, it has done the opposite, proposing what would be the most radical reorganization of the National Health Service, as the system is called, since its inception in 1948.

Practical details of the plan are still sketchy. But its aim is clear: to shift control of England's $160 billion annual health budget from a centralized bureaucracy to doctors at the local level. Under the plan, $100 billion to $125 billion a year would be meted out to general practitioners, who would use the money to buy services from hospitals and other health care providers.

The plan would also shrink the bureaucratic apparatus, in keeping with the government’s goal to effect $30 billion in “efficiency savings” in the health budget by 2014 and to reduce administrative costs by 45 percent. Tens of thousands of jobs would be lost because layers of bureaucracy would be abolished.

Yes, the move is to doctors, but more importantly, it's toward patients. In other words, the much lauded National Health Service is decentralizing, even as the ruling class of the United States attempts to push our system in the other direction.

Note, also, the underlying justification for government bureaucracy: the employment of government bureaucrats! One wonders what is given up in the private sector in order for paper pushers to survive on plush government compensation.

Why Dependency Is Chronic

The article, by Neil Downing, takes the tack of describing people who find their Social Security checks indispensable, but the recipient numbers are the important part, to my mind:

Now, 200,202 Rhode Islanders are collecting Social Security benefits, according to newly issued figures from the Social Security Administration’s Office of Research, Evaluation, and Statistics. ...

Nationwide, Social Security beneficiaries now number more than 52.5 million, up from 50.9 million as of December 2008, and 49.9 million as of December 2007.

Drawing on U.S. Census data, 19% —almost one-fifth — of Rhode Islanders receive some sort of Social Security benefit (which compares with 17% nationwide). The ratio is going to grow, given retiring Baby Boomers, shrinking generations, and longer lives, bringing the feasibility of the program into question.

The larger lesson (which one can see national politicians, especially Democrats, have learned) is that it's possible to buy constituencies. The trap of European quasisocialism (or the real thing) is that the political parties begin striving to prove that they can better manage benefits, not to admit that they are far less competent than the citizenry to manage individual lives.

They'll Find the Money or Change in Ways We Don't Like

One wonders whether U.S. legislators don't understand the consequences of their work — which isn't implausible, inasmuch as it's a real question whether they read the legislation on which they vote — or don't care. Of course, the conservative critique of government is that big government will tend to work in the interests of those with the incentive to manipulate lawmakers who cannot or will not see pitfalls, leaving the only rational and ethical choice for legislators to be to decline to micromanage the private society that they're supposed to serve.

The point comes to mind, this time, on news following passage of the "sweeping financial overhaul":

Investors are worried about banks' future earning power after Thursday's passage of the most dramatic rewriting of banking rules since the Great Depression. Adding to the pessimism are falling trading profits — which all three banks mentioned in the their earnings reports — and weak U.S. loan demand. ...

Yet banks are already moving to recoup any losses. One approach: making traditionally free services premium offerings. A Bank of America pilot program in Georgia, for instance, charges customers $8.95 a month to get paper statements or use bank tellers. The bank could start the program nationally as soon as next month.

Bank of America is also considering raising minimum balances on some accounts and charging customers who fall below it, Moynihan told analysts during a conference call.

Locking more money in savings accounts is probably not the best outcome for our struggling economy. But more generally, it simply isn't the case that companies — banks or otherwise — sit on large piles of money that they know they don't need and that they are willing to give up at the wave of the president's magic pen, as if they were children refusing to share their candy. That's not to say that businesses don't hoard wealth or don't rationalize self-serving strategies; it's merely to make the obvious point that they'll seek to profit as much as the market will bear, saving as much as they deem wise and distributing their profits as they perceive their internal dynamics to require.

When government operatives pick a particular policy of the banks, such as debt card "swipe" fees, to disallow by fiat, the affected organizations will look elsewhere. They're obviously in a much better position to know what fees can conceivably be imposed, and with industry-wide rules (excepting government debt cards, naturally), they've less to fear from their competition as they impose them.

Perhaps the most chilling paragraph in the article, though, is this:

But banks won't have free rein to raise fees on whatever they choose. The financial overhaul calls for the creation of a new Bureau of Consumer Financial Protection. The agency will have vast powers to enforce regulations covering mortgages, credit cards and other financial products to ensure customers are getting a fair deal.

Unelected bureaucrats, in other words, will now have "vast powers" to make a laboratory of the finance industry for experiments in consequences. At least when private businesses engage in such experimentation, they do so at the risk of their own financial health. When government agencies muck things up, they tend to find themselves with more authority.

And that reality presents a golden opportunity for large incumbent players in the industry who can find ways to take over and influence their regulators in such a way as to ensure that they profit even in calamity.

The Slow March of Papa Government

Public education is in keeping with much else during the Obama administration: The trends toward big-government control have long been in motion, their seeds well sown and fertilized, but are now being coaxed to the next stage of flowering. Lindsey Burke elaborates:

The New York Times reports that 27 states are planning to adopt the set of national standards developed by the National Governors Association (NGA) and the Council of Chief State School Officers (CCSSO) — standards being backed by the Obama administration with federal funds. ...

One thing the Times gets right — and which explains why the president is wrong to call these "voluntary" standards — is this: "Those states that are not winners in the Race to the Top competition may also have less incentive to follow through in carrying out the standards." ...

The administration is clearly aware of this little glitch. That's where Title I — $14.5 billion in federal funding for low-income school districts — comes into play. Earlier this year the administration released what they're calling a "blueprint" for No Child Left Behind reauthorization, which is likely to be debated next year. Within the blueprint, the Department of Education states, "Beginning in 2015, formula funds will be available only to states that are implementing assessments based on college- and career-ready standards that are common to a significant number of states."

The first ill effect that Burke cites with this development is that the federal program is likely to nationalize mediocrity (at best), because they are "a distraction from what really needs to be done to improve education." More importantly, and...

... most insidious of all, these national standards will come at the expense of parental control. Parents will have to relinquish the most powerful tool they currently have when it comes to their children's education: control over the content of state standards and tests. National standards will further diminish parental authority in education, and the federal government will gain more control as a result.

Moreover, the standards are already expanding from reading, writing, and arithmetic to science, and we can trust that the voluntary-if-you'll-forgo-money requirements will gather subjects like a black hole gathers celestial bodies and that non-public schools will rapidly be pressured to adopt the standards, as well. In the not-to-distant future, in other words, the debate may very well be the degree of autonomy that private religious schools have to reject federal standards for sexual education and ethics.

Which, from my perspective, brings us back to the imagined personifications of Good and Evil.

The Government They Prefer

It's always notably plausible that there's a larger truth in the mix when I agree with Bob Kerr, but while his column lamenting the possibly fatal restrictions that the Tiverton Town Council has placed on an annual charity event, this year, counts in that regard, I'd suggest that he should think on the larger lessons that the controversy teaches about government. As Kerr describes it:

For seven years, Jane Bitto, who owns Evelyn's Restaurant with her husband, Dominic, has gone to Town Hall to get the permit for "Singing Out Against Hunger," three days of music in September that has raised a lot of money and a pile of nonperishable food for East Bay Community Action’s food pantries. Last year, in a bad economy, it raised $25,000. ...

There have been complaints. That's what Bitto heard when she went to Town Hall. There have been complaints from people living on the opposite side of Nanaquaket Pond from Evelyn's. The music is too loud and it goes on too long, they say.

As Kerr touches on — and as I've seen occur time and again in local politics — the process wasn't one in which people with complaints were asked to step forward to make them and confront those whom they wished to restrict. Council members made general statements about hearing complaints — complaints submitted through the typical Rhode Island method of a note, visit, or phone call to people with power — and blindsided their target only when the time to the event was too short to mount an effective response.

Kerr calls it "the flip side of small town charm." Over on the Tiverton Citizens for Change Web site, I beg to differ. This turn of events is the entirely predictable consequence of small-town fiefdoms. "Community minded" tends to mean a town or neighborhood conforming with a small group's personal preferences, with differences resolved through imposition rather than compromise. Just like we weren't the ones who turned this year's financial town meeting into an offensive circus, or who strove to ban the Easter Bunny from the public schools a couple of years ago, it isn't us selfish tax-hawk newcomers who aren't willing to tolerate a little prime-time music come a late-summer evening.

Rather, it's the same folks who regularly squash businesses' attempts at economic development. It's the same contingent who skirted the law to raise taxes by an oppressive amount and who then sued TCC President Dave Nelson for having the audacity to complain about their tactics, including Town Administrator James Goncalo's sending of false documents to the state. In other words, Kerr and his sympathizers should look at their concept of a government that cares and question whether it's possible to preserve such an entity from people who care above all about themselves.

I've heard it stated many times that those who hate the town — as indicated by an aversion to massive mid-recession tax increases — should leave. Oddly, I don't expect to hear similar suggestions when the indication of that hatred is aversion to live music in a public place for an excellent cause.

Chicks in the City

Some folks--who I'll conveniently pigeon-hole as "Whole Foods" types--want to raise chickens in Providence.

About 35 people packed a small City Council meeting room on Thursday in support of a proposed ordinance that would allow residents to raise up to six chickens.

Proponents said raising home-grown hens provides a local source of high-quality protein, fertilizer and natural pest control. They said it also gives urban children a chance to interact with nature.

“It’s important for children to have an understanding of where their food comes from and an appreciation for the environment,” said Camille Smith, a South Providence resident who says she’s been raising chickens illegally for years.

Kenneth Ayars, of the state Department of Environmental Management, noted that chicken-raising helps meet a region-wide goal of boosting locally grown food sources. Currently, less than 1 percent of Rhode Island food is locally grown; in New England, it is about 10 percent, he said.

Dennis Tabella, director of Defenders of Animals, says the change would open the door for chicken abuse and neglect and that, unregulated, home-grown eggs would lead to an increase in cases of food poisoning and other health hazards.

“It opens up Pandora’s box,” Tabella said prior to the hearing.

E.J. Finocchio, president of the Rhode Island Society for the Prevention of Cruelty to Animals, said in a letter to the council that chickens would only exacerbate the city’s rat problem.

Leo Pollack, education director at the Southside Community Land Trust, which helped develop the proposed legislation, said the land trust supported the idea of a permit, so long as it was not costly or difficult for poorer residents and non-English speakers to obtain.

Stimulating Something Other than Lethargy

Stephen Spruiell argues that there have now been five rounds of stimulus spending by the federal government, totaling $1.085 trillion, which surpasses the cost of both wars in which our nation has been engaged over the last decade. He further argues that the approach that the government has been taking has been flawed in its very principles.

This isn't just a matter of wasted money, because the mounting debt will eventually come due and, moreover, the debt is creating a bubble likely to pop, moving us (at last) to the ultimate "too big too fail" collapse. Not surprisingly, I like his proposal for a reworked stimulus policy:

Keynesian economists also argue that scaling back stimulus spending might actually hasten a debt crisis. Cutting spending during a period of economic weakness, they say, would depress growth, which would depress tax revenues, which would make debt service even more difficult. The reason they are enchanted with this argument is that it never occurs to them to cut spending and tax rates simultaneously. To be clear, I am not claiming that tax-rate cuts would foster enough economic growth to pay for themselves, but there is strong evidence that they would foster more growth than deficit-financed government spending would — evidence that economist N. Greg­ory Mankiw recently summarized in the journal National Affairs. The incentive effects of tax-rate cuts would more than offset whatever harm (my guess is: very little) might accompany spending cuts of an equivalent size. Meanwhile, the spending cuts would offset the revenue lost to the tax cuts.

Considering Unemployment

Having followed the work of Providence Journal reporter Neil Downing for years, now, I'm confident that it was not a deliberate omission, but I can't help but wonder why a particular factor contributing to economic malaise didn't make it into his recent article about unemployment:

In the current recession — which began in late 2007, and is now in its fourth calendar year — people are often out of work for 6 to 12 months — "if they're lucky to find a job," [URI Professor Edward] Mazze said; many are out of work for more than a year — or longer, he said.

The main reason, Mazze said, is that "no jobs are really being created." Partly because of high rates of foreclosures and consumer debt amid this recession, "businesses are afraid to spend because consumers are not spending," Mazze said.

Businesses and consumers both are facing uncertainty not only because of the depth of the recession but because we've got a "transformative" regime running the country. Massive public debt. Looming changes to healthcare requirements. Environmental regulations appearing inevitable, whether Congressionally enacted or administratively implemented. And the list goes on.

In such an environment, planning for as-yet prospective demand is even riskier than usual.

We Didn't Agree to That

As Marc noted yesterday (and as we've been talking about for quite some time), Rhode Islanders are due to see their annual expense for public-sector pensions grow into the foreseeable future. I wonder how much issues such as this have contributed to the increasing disaffection with government.

Partly, that angst is a function of the feeling that there's now a ruling class that cannot be dislodged from office notwithstanding our ability to vote. Partly, it's the realization that the public-sector has insulated itself from the effects of the recession, at the expense of everyone else. (The supposed "stimulus" programs count, too). But pensions are a hard, cold fact that surely prods many private sector residents toward the opinion that our representative government doesn't really speak for us, and that we are not really responsible for the promises that it makes.

From the second link, above:

Republican Governor Carcieri had urged the General Assembly to eliminate entirely the promise of any cost-of-living increase, leaving it to the General Assembly to decide how much — if anything — the state could afford to give its retirees in any given year.

But the Democrat-dominated General Assembly was unwilling to go that far in an election year.

That was a decision they made, and it's easy to question — philosophically and practically — why they have such power over our money. Look at the language that even reporter Katherine Gregg uses (emphasis added):

To keep the promises state lawmakers have made over the years to more than 50,565 current and future retirees, the state will have to increase its contribution to the pension fund from 20.78 percent to 22.98 percent of payroll for employees.

And the pension system was built with such unrealistic expectations for a return on investment (8%, I believe) that the entire thing leaves the aftertaste of an illegitimate scam:

In their report, they noted the fair market value of the state's pension portfolio had dropped from $7.88 billion to $6.07 billion during the critical 2009 period they looked at, the rate-of-return on the investment of these dollars was minus 20.1 percent that year and despite some good years along the way, the state's "average market return for the last 10 years is 1.83 percent."

At the state level, of course, residents can change their entire slate of representatives by moving. Those who remain may or may not be able to oust the old guard, whether or not the individual representatives change, but perhaps there's reason to hope that more folks are asking themselves what "representative" ought actually to signify.

Rationing Life

I'd forgotten it during the national debate about universal healthcare, but in processing old columns for my personal site, I came across this, from May 2005:

Intrinsic human worth may not dominate the scales during other lifecycle stages for long, either. One indication of the slide is the British judiciary's hearing arguments concerning a problem that arises from government-funded healthcare: deciding whether the patient or the doctor/public has the final say on when to cease care.

As the lawyer representing the General Medical Council stated, "a doctor should never be required to provide a particular form of treatment to a patient which he does not consider clinically appropriate." Instead, in a "joint decision-making" process, the doctor should provide a menu of "appropriate" courses of action from which the patient may choose. The lawyer for the National Health Service noted that the doctor should compile the list of options "having regard to the efficient allocation of resources." It may not be appropriate, in other words, for treatment to include a hospital bed and the expensive attention and technology associated with it.

When the government encourages expectations of "cradle to grave" care, the focus of major decisions shifts from humans' dealing with the contingencies of life to society's managing human beings. An ailing patient can weigh every consideration related to his or her own life and choose, or not, self-sacrifice for things that he or she values — whether personal dignity or the preservation of savings for a family's well-being. When the authority ultimately rests with the public, however, this opportunity translates into a judgment of comparative value between citizens. There is a bottom line to balance, and it helps to exclude patients who cannot move sustenance to their digestive systems, for example.

We're now on the path.

Overt Newspaper Advocacy for Taxpayer Spending

Nobody wants to argue against assisting people who are striving to improve their lives during hard times, but when journalists leverage the public trust for naked advocacy, they do readers a grave disservice. Providence Journal reporter Steve Peoples did just that in a front page story on expiring social services programs, last Saturday, and the angles that he left entirely unexplored illustrate the bias. For example:

The 22-year-old Pawtucket native studies bookkeeping at Rhode Island College for six hours every Monday, Tuesday and Friday. She spends Wednesdays and Thursdays at an internship in the business office of Monster Mini Golf.

As Peoples notes, we're in the midst of "Rhode Island's worst economic downturn in decades." Doesn't it stand out, then, that a solvent company like Monster Mini Golf is filling a two-day-a-week job with an intern? The program arguably offers businesses valuable assistance, in that way, but one wonders why the reporter didn't ask the company what it would do were it not able to fill a slot with a free employee. And, for that matter, why does it take a government program to join companies looking for unpaid work and people willing to work without pay?

Then there's Peoples's choice of a very sympathetic protagonist. She's a 22-year-old single mother with a high school diploma. All we learn about the father of her child is that "it became clear that [he] could not contribute financially." Why not? What's he up to while taxpayers fill in the gaps that his actions have helped create? And didn't the young adults receive "comprehensive sex education," with lessons on (and probably access to) birth control? It goes a bit afield of Peoples's article, but it's also worthwhile to wonder whether, during an era in which how long and how extensively the government can and should prop up struggling citizens, we should also be devoting some attention to the deterioration of institutions — specifically, marriage — that shift some of the work over to the culture.

But the most egregious indication of the article's advocacy is the fact that it was published at all. Note the information that Peoples saves to the end, having only mentioned the possibility of a three-month extension in passing previously:

[The woman's] bookkeeping course ends in less than a month. There are no more training programs in sight. And her temporary welfare extension expires at the end of September.

State officials encourage her and anyone else hitting the new time limit to apply for another three-month hardship extension if necessary.

"Those 850 clients of ours that are closing are clearly entitled to a hardship. And the lack of finding work is something that fits our criteria," says Buffi, of the Department of Human Services.

In other words, after two years of giving them welfare payments, the state doesn't automatically cut people off. It just requires that the case be reviewed in quarterly increments. Whether there's a limit to those, Peoples doesn't say, but it seems to me that his article would have been more appropriate had he profiled somebody who isn't getting an extension. Of course, such a character wouldn't have made as effective a protagonist for the message that readers are meant to receive.

The Price of Insurance

Iain Murray offers a summary of the government's entry into the insurance business (subscription required), which practice has appropriately spread like an uncontrolled fire:

[Private fire insurer Nicholas] Barbon did more than promise to defray costs in the event of disaster. He formed a private fire brigade, staffed, as one observer put it, with "watermen and other lusty persons," to help put out fires. The Fire Office also instituted "fire marks," identifying insured buildings so that assistance could reach them more quickly in the event of a fire. Interestingly, the British government entered the market shortly afterwards but was unable to compete with Barbon, who persuaded potential customers that the government could not devote the attention necessary to the task.

The impetus for this move, although surely not entirely unrelated to community-mindedness, was financial. It was cheaper to pay firefighters than to pay out claims, and the more fires the company could prevent, the lower the premiums had to be, the more clients could therefore be found, and the better the company could compete. Although some anachronism is required, the notion of private firefighters deployed by an insurance company provides a good example to follow on this explanation, from Murray:

While private insurers estimate the risk of various activities, price it accordingly, and thereby encourage insured parties to carefully consider whether undertaking the activity is worth the cost, government insurance does the opposite: It minimizes losses from engaging in risky activities by taxing less risky ones, encouraging hazardous practices.

Before contracting with a client, a private fire insurer could look at such things as whether the client smokes, what sort of heating system the house uses, and the safety of cooking appliances. A premium adjusted accordingly would signal to the individual and to society at large that there is a cost to actions that can burn down the house — the city. With no direct personal cost associated with public fire protection, and with no fear that coverage could be lost, individuals have no reason to adjust their behavior rather than drive up the widely distributed expense.

We're about to experience that (even more painfully) with health insurance.

The Question of Cape Wind Profits and Marsha Marsha Marsha!

Mass AG Marsha Martha Coakley is an ick. The fact that she facilitated the election of Scott Brown by running a lousy senate campaign does not ameliorate her sins, which extend, most recently, to an excuse for illegal immigration

Technically, it's not illegal to be illegal in Massachusetts

which rivals "I didn't inhale" for hair-splitting lameness.

Having said that, I concede that she is not wrong to demand the disclosure of the profits anticipated from the Mass Cape Wind project.

Massachusetts Attorney General Martha Coakley is demanding that Cape Wind’s developers disclose cost and profit estimates for the energy project and is questioning whether power from the proposed Nantucket Sound wind farm would be a good deal for consumers.

Is this an anti-capitalist, anti-free market, anti-privacy stance on the part of someone (me) who is pro-capitalism and prefers that Big Brother butt out of everyone's business? Certainly, that last describes Cape Wind's reaction to the AG's request.

Cape Wind’s developers are fighting Coakley’s demand, saying they believe their cost estimates are proprietary and should be kept confidential.

Unfortunately, they have no basis upon which to make this assertion. The Nantucket wind farm is not a capitalist or free market project, nor are any of Cape Wind's projects in the area. They have secured a government mandate that compels everyone to pay a lot more for the electricity generated by these turbines. This makes them government projects; therefore, privacy is not a factor.

We can take this a little further. One of the reasons that profits are paid is because the investor takes a risk with his capital. He's gambling that the project will be a success and that he will secure the return of his investment and then some. Profits are in part the reward for that gamble. But if he calculates wrong, he loses his money.

Yet, theoretically, there is no risk with the Cape Wind project. The return has been guaranteed by an overly intrusive government (mistakenly attempting to alleviate a phenomenon that has been linked weakly, if at all, to the generation of electricity through fossil fuels ... but that's a secondary matter here).

So, disclosure of profits. Yes, minimally. A larger question arises, however. In light of the absence of risk attached to this project, plus the government mandates which make it, effectively, a government operation, why should Cape Wind make any profits at all?

A spokeman for the company points out that the AG's demand

could have a chilling effect on companies investing in clean energy projects in Massachusetts going forward.

Respectfully, sir, those of us who face the prospect of paying three or four times market rate for electricity while watching ever more businesses flee the area to escape pointless expenses such as this sure hope it does.

Hucksters Not Wasting the Crisis

Funny, I hadn't heard insufficient involvement of "disadvantaged groups" included among the contributing factors to our the economic crisis that supposedly necessitates a stronger government hand in the finance industry. And yet:

Chris Dodd, Barney Frank, and Barack Obama insist that the new financial regulation bill pending a vote in the Senate is a necessity to restore stability to troubled markets. Instead, it looks as though Democrats have been more concerned about quota systems than economic growth. Buried deep within the bill is a requirement for all regulatory agencies with jurisdiction in economic arenas to start beancounting based on ethnicity and gender.

It's almost as if regulation is not a means to correct problems, but an end in itself, expanding government authority to dictate the terms of our social existence.

Charity and Government

It is fundamental to the view of big-government advocates and outright statists that the role of government is to run the society. Not just those aspects (like policing) that require legitimate use of force or (like foreign affairs) that require a unified social face to present to outside entities or (like roads and infrastructure) that empower citizens to compete with each other to the economic benefit of all, but everything. The notion is that a centralized bureaucratic brain can discern the problems of the nation and resolve them.

Of course, conservatives see that premise as insidious and sinister and don't see the creeping, relentless means by which government expands as indicative of a reasoned effort to implement intelligible plans so much as a sly strategy for aggregating power for its own sake. John Miller offered an example in a recent essay about governments' overtures to regulating (and taxing) private charity:

The fight is finished in Florida, at least for now. But the war over government control of philanthropies is set to break out in other state capitals as well as in Washington, D.C. As politicians seek to close budget gaps, many are turning their gaze to high-income givers and foundation endowments — and wondering how they can plunder the wealth that allows Americans to give more than $300 billion annually to support everything from churches to cancer research. President Obama has proposed slashing the charitable deduction for the richest Americans. So far, Congress has resisted. Yet some of its members would like to go even further than the White House. California Democrat Xavier Becerra, who sits on the House Ways and Means Committee, has referred to the tax-favored treatment of charitable donations as a "$32 billion earmark" because that’s the amount of revenue Washington supposedly forgoes each year. Becerra wants Congress to play a stronger role in overseeing philanthropy: "I have an obligation to make sure that those $32 billion that would have gone to the federal government are used for a . . . public good."

The "public good" is in the eye of the beholder, of course. Last year, Becerra embraced a rather specific vision of it when he spoke at an event sponsored by the National Committee for Responsive Philanthropy. He praised the release of an NCRP report called "Criteria for Philanthropy at Its Best." The document called on foundations to spend at least half of their grant dollars on "lower-income communities, communities of color, and other marginalized groups." It also said grantors should spend at least a quarter of their donations on "advocacy, organizing, and civic engagement to promote equity, opportunity, and justice in our society."

It's a four-step trick of which Americans should beware: As illustrated in the first paragraph of the quotation, step one entails government officials asserting authority based on any thread they can find, in this case, the supposedly foregone tax revenue, as if allowing charitable organizations to keep money that others have freely given is no different than cutting a public check for the same amount. (Becerra ignores, of course, that taxing donations would translate into fewer of them.) Step two, noted in the second paragraph, sees the government implementing regulations that appeal to particular notions of charity, equality, and redistribution.

And step three leaves all pretense discarded, as at least one state government has already revealed:

Earlier this year, Arizona's legislature snatched a $250,000 bequest from the coffers of the Arizona State Parks Board. The politicians decided that the gift of Asta Forrest, a Danish immigrant who had wanted to support a park system that she had grown to love, instead would help close a budget gap. "She never would have given the money if she had known that the state was going to take it away from the parks board," a friend told the Arizona Republic.

And then, when the government has killed private charity by (1) taxing it and (2) scuttling donors' confidence that their money will actually support the cause that interests them, the argument will become — you guessed it — that the government must pick up the slack through more taxation and government "oversight."

The "Stimulus" in Miniature... or Hatchback

It appears that many residents' car tax bills will offer an early illustration of the consequence of the big-spending stimulus pursued by Congress and the White House:

A number of cars, which normally lose value each passing year, have increased in value this year as a result of several economic forces hitting the used car market. ...

"There are less used vehicles out there for people to buy," said [state Vehicle Value Commission Chairwoman Linda] Cwiek, who also is the tax assessor in North Kingstown. She placed blame for the short supply of used cars on the federal "Cash-for-Clunkers" program.

To stimulate a sagging automotive economy and to aid the environment, the federal program offered financial incentives to turn in older vehicles in favor of buying more fuel-efficient models. In all, the program removed 677,842 vehicles from the road and sent them to the shredder. That prevented them from entering the used-car market.

Not only does the government have to take money out of the economy to put money into it (even if it takes from the future), but distortions of the marketplace will ripple. In this case, the effect was exacerbated by the environmentalist lunacy of destroying the cars. Many of us observed at the time that the government was essentially paying out money to ensure that used cars would be more expensive.

On a broader scale, big government-initiated spending only works as a stimulus if the economy is already headed for a breakthrough. Softening the interim with public debt is a gamble that's best hedged, and Obama and the Democrats went all in, mostly in order to prevent government entities from having to contract.

ADDENDUM:

By the way, it looks as if I wasn't so unreasonable to question the General Assembly's change of law allowing vehicle assessments to go up for the purposes of taxation.

A Comfort of Consistency

Do you need an example of the reason that it's inadvisable for the ostensibly objective entity that regulates the marketplace to participate in its activities? Here's a small one:

Limits on the fees banks charge merchants who accept debit cards would not apply to government-issued cards, under a tentative House-Senate deal aimed at easing worries raised by state treasurers.

The agreement announced Monday softens a Senate provision in a broad financial regulation bill that requires the Federal Reserve to limit the amount banks collect from merchants for every debit card transaction.

We err in seeing the playing field as business versus government. Government is just another entity and it will naturally seek to draw power and authority toward itself. Here, it's giving itself advantages in the promulgation of a particular technology and service. Government cards may never expand, but as cards issued by private banks become more expensive for consumers, those issued by states and the feds will become more attractive candidates for future applications. In other words, if we see debit cards as a marketplace, government is moving to corner it.

Also evident in the above is that it will privilege those among the interests affected by its policies (i.e., state treasurers) who are most closely aligned and most easily controlled by its bureaucracy.

Earning Happiness

The behavior of both sides of the liberal-guilt–welfare axis might find some explanation in this line, drawn from a review of Arthur Brooks's The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America's Future by Matthew Continetti (subscription required):

It is not inequality, Brooks writes, that makes people unhappy. It is a lack of self-worth. It is the feeling that success is unearned.

On the welfare-recipient side, Continetti notes:

In 2001, the University of Michigan's Panel Study of Income Dynamics noticed a correlation between welfare dependency and sadness. The panel found that going on the dole increased the chances of feeling "inconsolably sad" by 16 percent. "Welfare recipients," Brooks writes, "are far unhappier than equally poor people who do not get welfare checks." And while Brooks is quick to point out that correlation is not causation, the data certainly suggest that welfare doesn't make you any happier.

On the guilty liberal side, one thinks of the simplified explanation that Rush Limbaugh (gasp!) frequently offers: they know that they're wealthy beyond their merits, so they assume the system that so blessed them must be unjust. Rather than returning their "unearned" rewards, though, they seek to take a smaller amount from everybody — regardless of desert — in order to give to those who have "unearned" and not received.

Move beyond — if you can — the previous paragraph's poke at our pals on the left and focus on Brooks's point, which he states thus, in a 2007 City Journal article:

What I found was that economic inequality doesn't frustrate Americans at all. It is, rather, the perceived lack of economic opportunity that makes us unhappy. To focus our policies on inequality, instead of opportunity, is to make a grave error—one that will worsen the very problem we seek to solve and make us generally unhappier to boot.

Pointing out that income inequality in the United States has been expanding because "the rich are getting richer faster than the poor are getting richer," Brooks highlights the astonishing fact that, for some who rail against inequality, discouraging work among the successful is actually a feature, not a bug, of income redistribution:

According to British economist Richard Layard, "If we make taxes commensurate to the damage that an individual does to others when he earns more"—the damage to others' happiness, that is—"then he will only work harder if there is a true net benefit to society as a whole. It is efficient to discourage work effort that makes society worse off." Work, according to this postmodern argument—contrary to millennia of moral teaching—is no different from a destructive vice like tobacco, which governments sometimes tax in order to discourage people from smoking.

We who are productive, but not yet successful, might wish to interject that making gobs of money typically involves enabling other people to make or save money, too. As we've discussed on Anchor Rising before, replacing the rich folks who run WalMart with an army of mom 'n' pops would eliminate the employment of the large company's relatively well-compensated employees and disallow people of the same economic class from economizing in the way that WalMart's retail model allows.

Unsurprisingly, the difference in perspective ultimately seems to come down to whether one views society as a collection of castes or of individuals. The left sees those who work for WalMart as People Who Work for Walmart and, implicitly, always will. The right sees them as people who currently see WalMart as offering the greatest opportunity given their current circumstances. The poster representative for the former view is the single mother grasping about for any means of supporting her family; the poster representative for the latter view is the young adult making some side cash while learning the benefits of a strong work ethic and developing workplace interpersonal skills.

By way of a disclaimer: these distinctions are false. The single mother is just as apt to see "check out clerk" as a stepping stone, and the young adult may just as likely max out his potential stocking shelves. The point is that one side of the political divide presents current occupation as demonstrated maximum potential without public assistance, while the other side leaves potential up to the individual to demonstrate. (Shades of this difference can also be seen in union lamentations that teachers don't make as much money as others with the same amount of education. The problem is that individuals who go on to higher-paying gigs — say, quarter-million-dollar education commissioner — no longer appear in the "teacher" category.)

As Brooks and Continetti also explain, the effect of attempts to eliminate income inequality don't increase happiness. Because perceived opportunity is the greater contributor to that emotion, their policies actually have the opposite effect. We can take this assessment a step forward if we look to an underlying consequence of the mindset, whether it's conscious or not: The left's policies make government the provider of opportunity. To the extent that the right believes opportunity is provided (rather than seized from amidst the flow of uncontrollable natural and social forces), its policies put the responsibility in the hands of individuals.

Somebody Has to Make Hard Choices

Reading about the petering out of unemployment benefits, I have to admit some cynicism. The hand-scribed note in the border of my newspaper notes that people want jobs, but the federal government is giving them expensive and counterproductive healthcare "reform," but it's clear that a great number of our fellow citizens expect it all. But the article doesn't provide much meat for that discussion, so I'll settle for a tangential juxtaposition. First:

[Unemployed warehouse worker Edward Gullage, of Pawtucket] is looking into state-sponsored training courses in plumbing, carpentry and landscaping, while searching for work. He lives with his wife, who has a job, but once his benefits expire, the couple will have to make hard choices about their spending, he said.

Second:

Opponents [of renewal of federal benefit programs], including Senate Republican leader Mitch McConnell, do not want to renew the programs if it means higher taxes (which they said will kill jobs) or increased borrowing (which they said will boost the national debt, burdening future generations).

Somebody has to make hard choices. Actually, I'd argue emphatically that the government's options for decreasing spending are quite the opposite of difficult, and it would be nice to believe that the Gullages in our current economy understand as much. My cynicism derives from my suspicion that they do not and would prefer, with the Democrats, to push the hard choices on to others. Unfortunately, those others represent the segment of American society on whom we must rely for an economic recovery.

Money for Nothing and Your Economy Cut Free

This is interesting (subscription needed):

You don't have to be a scholar to know that congressional chairmen bring home the pork. But researchers at Harvard Business School, working with decades' worth of data, put a number on it: Earmarked spending targeted at a specific state increases by about 40 percent when one of that state's senators becomes chairman of one of the major committees, such as appropriations, and by about 20 percent when one of its representatives heads such a committee in the House. The surprise twist: The economy chokes on all that pork. Rather than thriving on the injections of federal cash, local businesses actually retrench.

Government money helps the government and hurts its private-sector competition for funds and for employees. The full report is available online as a PDF.

Tiogue School's Insane Idea of a Weapon

A half inch piece of plastic. H/T WPRO's John Depetro; kudos to WPRI Eyewitness News for exposing this palpable danger (or something) to the students of Tiogue School:

Eight-year-old David Morales says he made the camouflage hat with army men on top, as a school project. The hat was more than just a fashion statement, it was meant to honor military members.

When Morales wore the hat to classes he was informed by Tiogue School officials that it violated their no tolerance policy that prohibits students from bringing drugs or weapons to school.

... because of the tiny plastic guns that the tiny plastic army men were carrying. Get a magnifying glass as you click on the WPRI link to view the hat and the "weapons" and to fully comprehend the danger that they posed. The only question is why the Tiogue School didn't call out a SWAT team ...

Formerly Admirable, Now a Bad Example on the Way to Obviation

Bringing his military eye to the topic, Theodore Gatchel provides an astute summary of the Obama movement in government:

Two competing schools of thought have developed. One holds that the government's role should be one of educating people about the risks so that they can make informed decisions. The other school holds that the issues are too complex for most people to comprehend, thereby requiring the government to make the decisions for them.

President Obama is clearly in the latter camp, which fits nicely with his promise to fundamentally change America. In this case it means transforming the country from one in which people who take risks are admired and rewarded to one in which risk taking is regarded as harmful to the common good.

To be sure, it's possible to go too far lauding unnecessary or ill-considered risks (or those that involve others without consent), but the freedom and opportunity of turning from security en route to improvement as the individual defines it has been essential to the American character — and should remain so.

Tightening the Union Loop into a Noose

It could just be that I'm in my annual phase of presummer burnout, or it could be an indication of the complexity that Big Government imposes on a democratic society — to such degree that it ceases to be possible for the individuals who comprise that democracy to function as they must — but the number of fronts for manipulating the public sector feel like they've been multiplying, lately.

The issue that brings that statement to mind is the Democracy Is Strengthened by Casting Light on Spending in Elections (DISCLOSE) legislation that Democrats have brought to the table in Washington, which Bradley Smith describes, here. Given my usual areas of focus, this part earned a bracket in the margins of my issue of National Review:

DISCLOSE's partisanship is apparent in its different treatment of corporations and unions. Every major federal campaign-finance-reform effort since 1943 has attempted to treat corporations and unions equally. If a limit applied to corporations, it applied to unions; if unions could form PACs, corporations could too; and so on. DISCLOSE is the first major campaign-finance bill that has not taken this approach. For example, it prohibits corporations with government contracts of as little as $50,000 from making independent expenditures in elections or engaging in "electioneering communications." This very low threshold would bar not only large contractors such as Boeing but also thousands of small businesses from exercising the rights recognized in Citizens United. Yet no parallel provision exists for unions that bargain with the government for multimillion-dollar benefit packages. Corporations that received TARP funds are prohibited from spending, but unions at those companies — which in many cases benefited far more from the bailouts than shareholders — are not.

Smith doesn't go far enough, to my mind, by raising this as a matter of teams in a partisan dispute. It's actually part of a broad effort to shift the role of unions in our political society. Recall a post from November that noted, tangentially, that hospitals receiving federal money are barred from lobbying the government while their workers' unions are not (see "addendum," below). As the federal government continues to grow — especially in the amount of our economy for which it takes direct authority — the loop whereby businesses rely on the unions with which they negotiate to lobby the government will tighten into a noose, excluding organizations that are not unionized and siphoning off more money for politicians, bureaucrats, and the unions that serve as the middleman transferring economic wealth to the public sector.

ADDENDUM:

I've said before that among the greatest advantages of blogging to a mixed audience is that one is more likely than not to have errors or inadvertent stretches corrected. In that vein, Stuart called me on the statement about hospitals receiving federal money being barred from lobbying the government. Going back to my initial citation, I see that I paraphrased the following poorly:

SEIU's corporate campaigns, however effective, are nothing new. Stern's real breakthrough came when he realized that labor could offer a carrot as well as a stick Around 50 percent of SEIU's members work in the health-care industry as nurses, hospital attendants, and lab techs. The facilities that employ such workers benefit from a number of government programs. SEIU's pitch was simple: Let us organize your workforce, and we'll use our lobbying power to push for increased government spending on health care.

It worked. Fred Siegel and Dan DiSalvo recently observed in The Weekly Standard that, "under the brilliant leadership of Dennis Rivera, [SEIU Local] 1199 built a top-notch political operation, and with the hospitals, which were barred from political activity, formed a partnership to maximize the flow of government revenue." The alliance has been so successful, they wrote, that New York now spends as much on Medicaid as California and Texas combined. Rivera now serves as the SEIU's point man on national health-care-reform legislation, with over 400 union staff members working full time at his disposal. Sen. Chuck Schumer called him "one of the few key players" shaping the final bill.

In essence, I joined concepts that were only related: The union offers lobbying clout, but the political activity from which hospitals are barred probably doesn't have to do with the federal dollars that the lobbying seeks, but rather with such things as bans on non-profit political activities. My understanding is that unions are not so restricted.

So, the statement in specific was incorrect, but the point remains valid. To the extent that government restrains the employer in political activity and speech, while leaving unions exempt from those restraints, the union and the government gain leverage versus the productive organizations.

A Direct Line from Health, Through Information, to Political Manipulation

The problem with giving government authority over everything is that, well, it gives government authority over everything. For a shocking example, consider Mark Steyn's description of a minor controversy in Great Britain.

It seems that, in the course of the recent election cycle, the then-ruling Labour party sent out postcards warning that, if victorious, the Conservatives would reduce access to breast cancer treatment. What's shocking is that Labour appears to have culled the list of all citizens to include only those who have" been either diagnosed with, treated for, survived or, in at least one case, died of breast cancer." Writes Steyn:

So a quantum leap in targeted marketing has just been made: The governing party of a free society was able to identify women with breast cancer in swing constituencies and send them a postcard warning that if you vote for the opposition they’ll cut off your chemo and kill you.

I suppose that's not much different than local school committees sending parents warnings that their children will have to return to paper-less one room school houses if they don't receive the budgets that they desire. The difference is that it's unavoidable for school departments to know which households have children in the school system, but at least in the United States, it isn't yet the case that political parties have ownership of everybody's personal health histories.

The easy availability of information has its pluses and minuses. The real danger lies in giving a centralized authority the power to use that information for its own purposes.

More of What Americans Don't Want

The financial regulation legislation — which has passed both houses and is awaiting reconciliation — hasn't raised the ire that healthcare did before it. Several factors come play into that dynamic no doubt: financial regulation is less tangible, Wall Street makes a better villain than insurance companies, folks are tired from the healthcare skirmish, and so on. But it still represents fine evidence that we need wholesale change of the people representing us in Washington.

Kevin Williamson describes one reason why (subscription required):

Much too much has been made of the $50 billion resolution fund and the levy that financial firms would pay to fund it. Senator McConnell abominated it as a "bailout fund," but he was paying attention to the wrong pot of money: That $50 billion is a little ladle-load of cashola compared with the buckets of schmundo that the Dodd bill will make available for indirect bailouts and endless support of troubled businesses — financial and non-financial firms alike. Case-by-case interventions may be out, but the bill would allow — in fact, appears designed to ensure — bailouts for the creditors of troubled firms. Under the Dodd bill, Wall Street firms (or unions, or sovereign-wealth funds, or anybody else with the right political connections) who are exposed to losses on failing financial companies will be able to collect significantly more money than they would be able to under normal bankruptcy procedures. That is the bailout.

We've seen this before, of course. The AIG bailout, for instance, amounted to bailout of Goldman Sachs and other banks that had a lot of AIG exposure and would have had a harder time being made whole in bankruptcy court than they did under Washington's management. The Dodd bill instructs that the government shall "ensure that unsecured creditors bear losses in accordance with the priority of claim provisions" in the existing law — but how well has that worked out in the past? What legal authority did the Obama administration have to upend the normal priority of claims in the bailout of General Motors, a corrupt deal that saw secured creditors forced to take substantial losses while unsecured creditors received a better deal than they were legally entitled to — all because those unsecured creditors were the union bosses who put Barack Obama into the White House? That wasn't just a bailout of GM; it was also a bailout of the UAW. That's the kind of bailout regime that the Dodd bill will make permanent: the indirect bailout.

The Fatal Bubble

What defines an economic bubble? There are probably technical answers to that question, perhaps even involving percentages and such, but the basic inference is an apparent growth that's really just full of air, deceiving people into behaving as if the cause of the increase is actually something of substance when, in reality, it could dissipate immediately upon exposure to the atmosphere.

In a recent letter to the Providence Journal, Philip Overton, of Westerly, expresses something that has likely been nagging at a great many of us, in recent months and years:

There is no fiscal integrity in our government right now and this is the next possible great bubble building.

The substance in which we've been deceived to believing is that the government can absorb the vicissitudes of the economy. We're relying more and more on government not only to fill the craters that other bubbles have left when they've popped, not only to fill other bubbles (sometimes in the form of doomed companies), but also to conduct matters of economy and even personal well-being. It can't last.

The only question is what happens when the government bubble bursts. A free-for-all of wealth grabbing and recriminations seems likely, and let's not forget that there are those on the global playground relentless in the eye that they keep on our every step, in the hopes that the lone superpower will falter.

Race to the Cash Crop

I'm not sure one has to be a conspiracy theorist to think that government policies have become little more than a series of scams perpetrated on the American people. Take Secretary of Education Arne Duncan's Race to the Top concoction. Sure, there's some favorable nods in the direction of reform and school choice, but those nods may be easily dispersed when eyes turn away. And even up front, as Frederick Hess points out, they aren't really the meat in the stew:

A few of the 19 priorities rewarded states for moving on measures such as charter schooling and merit pay, with states earning 40 points (out of a maximum total of 500) for supporting high-performing charters and 58 points for using student-achievement results to improve teacher and principal effectiveness. But the vast majority of the points are awarded for compliance with often woolly federal criteria: 65 points for articulating an agenda and securing local buy-in, 10 points for prioritizing education funding, 20 points for providing effective support to educators, and so on. If you're not entirely sure what these categories entail, welcome to the club; they reward states for procuring signatures of union support, for spending more on schools, and for adopting impressive-sounding professional schemes.

Andy Smarick, a Bush Education Department veteran who has painstakingly reported on RTTT, recently observed, "All this talk about revolutionary state change has really been overstated." While RTTT enthusiasts talk of states' lifting caps on charter schooling or removing "firewalls" that prevent student-achievement data from being linked to teachers, he noted that "the full story of states' legislative changes is more complex and less exhilarating." No state that previously prohibited charter schooling has enacted a new charter law to attract RTTT funds, and while Wisconsin technically relaxed its data firewall, it still prohibits student achievement from being used in teacher evaluations. Smarick explained this resistance to major changes as a consequence of union influence: "The problem is how much states had to give up to get that union support and buy-in."

Take away the catchy buzz words meant to disarm natural opponents of schemes implemented by and for big, centralized government and what you've got is a huge bundle of money being used to persuade state and local officials and bureaucrats to seek special-interest buy-in.

Whistling Past the Regulatory Problem

Senator Carl Levin (D, MI) strode right past the fundamental problem while lambasting Goldman Sachs executives (emphasis added):

Wall Street is on the wrong side of this fight. It insists that reining in that -- those excesses would unduly restrict the free market that is the engine of American progress.

But this -- this market of ours isn't free of self-dealing or conflict of interest. It isn't free of gambling debts that taxpayers end up paying.

It isn't free of those debts because — primarily by backing risky mortgages through Fannie Mae and Freddie Mac and increasing barriers to competition with regulatory bars to clear — the government has allowed too-big-to-fail bailouts to become an implicit part of the economy. Layering on regulations will only increase complexity and the potential for the manipulation of the financial industry, whether for financial or political purposes.

Regulation Taking a Grain of Salt

Sometimes, just after waking in the morning, it's possible to believe that people like this do not actually exist, but they're out there, they're more plentiful than is good for our nation's health, and they seem to be getting bolder and bolder:

If State Assemblyman Felix Ortiz has his way, the only salt added to your meal will come from the chef's tears.

The Brooklyn Democrat has introduced a bill that would ban the use of salt in New York restaurants - and violators would be smacked with a $1,000 fine for every salty dish.

"No owner or operator of a restaurant in this state shall use salt in any form in the preparation of any food," the bill reads.

Every movement and every era has its kooks, but this example cuts a bit too close to the debate about healthcare costs and government involvement in that industry for my tastes.

Handing Charitable Authority to the State

In a recent iteration of his editor's column for First Things, Joseph Bottum takes up the topic of the branches of religious organizations that reside at the edges of the organized church, itself, what he calls "limicole institutions":

As [Archbishop] Chaput notes, the first leverage typically used is financial. Public bureaucrats and lawmakers pressure Catholic agencies by threatening to withdraw funding or to revoke tax exemptions. And, as a result, Catholic Charities in many jurisdictions end up obliged, for both practical and legal reasons, to hire a majority non-Catholic staff.

Of course, that issue is but one aspect of the larger issue of religious liberty. Over the next decade, this is where the battle of religious liberty will be most visibly fought—in the limicole institutions. And particularly in the Catholic ones, as the most visible and, in bulk, significant. Homosexual activity, contraception, and abortion will be the flashpoints. To quote, again, Archbishop Chaput, "Critics rarely dispute the Church's work fighting injustice, helping community development, or serving persons in need. But that's no longer enough. Now they demand that the Church must submit her identity and mission to the state's promotion of these newly alleged rights—despite the constant Catholic teaching that these behaviors are personal moral tragedies that can lead to deep social injustices."

As I've stated, before, there are two issues, here, the first being the obvious matter of religious liberty and the lines that protect it. The second issue, which is less remarked in this context, is the oppressively broad government that, frankly, many religious people have helped to bring about as they've sought to leverage civic authority as a means of social change and charitable action.

Once it became a matter of law that the government could enforce non-discrimination in employment, it became a matter of political maneuvering to define what constitutes discrimination. It should not surprise religious people that those who find their worldview misguided, even fundamentally offensive, would determine that their religious doctrine violate the law. Similarly, as the government has taken on the role of regulating and funding charitable services — a cause for which religious officials and laypeople continue to advocate — it has gained authority over those who provide such services as a religious mission.

People seem to believe that common sense and reasonable allowances will always be a factor in government action. It's a dubious proposition of itself, but religious citizens, especially, ought to appreciate the problem that their civic opposition believes that common sense and reasonable allowances are subjective, shifting concepts, conveniently tending toward their core beliefs, not ours.

The Way to Government Ownership

Since I mentioned, earlier this morning, the government's "overtaking of healthcare," it's relevant to point out an explanation offered in a recent National Review, in the magazine's short-take "The Week" section (subscription required):

American college-loan policy offers an illustration of how the government can absorb an activity incrementally, claiming to cherish the benefits the private sector provides until the bait has worked and it's time for the switch. Government support for student loans began in the form of subsidies for private loans, much as the Democrats' health-care bill would succor the insurance industry by subsidizing its product while forcing people to buy it. In the 1990s, Democrats added a "public option" — making government the direct provider of some student loans — with the Clinton administration claiming that "students and schools are served by healthy competition" between the private sector and the government. This is the same rhetoric Obama used when he tried to sell us a public option for health care. And now we see how quickly Democrats dispense with the rhetoric of competition when a government takeover seems viable: The new student-loan bill would make the public option the only option, thus completing the absorption of the activity. In a similar way, the current health-care legislation isn’t the endgame.

Government ownership of student loans gives politicians strong influence over your career. Healthcare will do the same to your body.

Oops, Congress May Not Have Excluded Itself from Health Care Reform

Robert Pear reports in the New York Times, of all places.

The law promises that people can keep coverage they like, largely unchanged. For members of Congress and their aides, the federal employees health program offers much to like. But, the [Congressional Research Service] report says, the men and women who wrote the law may find that the guarantee of stability does not apply to them.

“It is unclear whether members of Congress and Congressional staff who are currently participating in F.E.H.B.P. may be able to retain this coverage,” the research service said in an 8,100-word memorandum.

And even if current members of Congress can stay in the popular program for federal employees, that option will probably not be available to newly elected lawmakers, the report says.

Further,

The law apparently bars members of Congress from the federal employees health program, on the assumption that lawmakers should join many of their constituents in getting coverage through new state-based markets known as insurance exchanges.

But the research service found that this provision was written in an imprecise, confusing way, so it is not clear when it takes effect.

The new exchanges do not have to be in operation until 2014. But because of a possible “drafting error,” the report says, Congress did not specify an effective date for the section excluding lawmakers from the existing program.

These are not the only complications to Congressional health care coverage in the brave new world of health care reform that the Congressional Research Service uncovered.

Two questions pose themselves. Pear asks the first.

If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?

Well, Speaker Pelosi did say that Congress had to pass health care reform so that we could find out what's in it. Who would have guessed it was going to be a surprise for Congress as well?

Secondly, if health care reform is as wonderful as advertised, why does Congress want to exempt itself from it? And please don't trot out the line that "Everyone will get to choose their health care plan, just like Congress does now!" This is nonsense. After health care reform goes fully into effect and all health insurance carriers have declared Chapter 7, the great unwashed will be getting their medical care from one source only - the American NHS - while the number of concierge doctors in the DC area will blossom to serve the new health care patrician class on Capital Hill.

No? The question stands, then: why does Congress wish to exempt itself from one of the most far-reaching laws it has ever passed?

The Nanny State Will Tax Your Skin

Fellow blogger and Providence Firefighter/EMT Michael Morse and his wife sent an op-ed to the Providence Journal objecting to an Obamacare tax on tanning salons:

A small group will be the first to pay for national health-care reform, the first to put their hard-earned dollars into the system. Starting July 1, they will pay 10 percent more for a service that helps them feel better and look better and promotes healthy living.

You can’t tax sunshine, right? Think again. The indoor-tanning industry, mostly small-business owners, the majority of them women, has been singled out to provide funds for a program that claims to be equitable for all.

As they note, other skin-related professions avoided proposed taxes because of the size of their lobbies and the urge to protect people from themselves that has begun to creep from smoking to tanning (let alone eating fast food). For their part, the Morses dispute the ill effects of artificial tanning on health.

Personally, I think that's besides the point. It isn't the role of government to impose a healthy lifestyle on individuals, especially with matters of such long-term repercussions as exposure to light. We'd best get used to it, though. With the government intimately involved in our healthcare system — even more than was already the case — your every behavior is now a matter of interstate commerce.

For Us to Be Them, Somebody Must Be Us

Advocates for bigger government love to cite the small, still relatively homogeneous nations of Europe as an example of the bounty that awaits the United States if it just relies more on government to make decisions. Europeans, they say, are happier, more secure, less stressed out, etc. On Anchor Rising, we have argued, can argue, and will surely argue again the merits of these various claims, but for a moment let's grant that they aren't complete bunk.

The missing consideration — again, as we've argued before — is that Europeans have the space to create their little oases because the United States stands as a giant blocking the beating sun. Canadians can dictate lower costs for prescription drugs because Americans can pay more and thus keep innovation going. Great Britain can finance greater social welfare benefits because the United States finances global security. The French can take months at a time off from work because Americans will continue to work hard creating the technological innovations that give the world a semblance of moving forward.

Jonah Goldberg offers this analogy:

Look at it this way. My seven-year-old daughter has a great lifestyle. She has all of her clothes and food bought for her. She goes on great vacations. She has plenty of leisure time. A day doesn't go by where I don't look at her and feel envious of how good she's got it compared to me. But here's the problem: If I decide to live like her, who's going to take my place?

Europe is a free-rider. It can only afford to be Europe because we can afford to be America.

The essential political question currently on the table, in the United States, is whether enough Americans see the country's current path for what it is and are willing to plug their ears to the siren call of welfare infantilization.

Can You Hear the Sly Taxation?

Here they go again:

Bills have been introduced by Sen. William A. Walaska (D-Dist. 30, Warwick) to increase medical insurance coverage for hearing aids and to require insurance coverage for surgery and services associated with hearing aid implants.

Without a doubt, hearing loss increases the difficulty of one's life. So does poor eye sight and any number of other ailments and disabilities. There are two problems with this continuing trend of legislating mandatory insurance coverage for related aids, medication, and surgeries:

1. It essentially turns insurance premiums into a tax to fund redistributed wealth, without allowing voters a direct influence on those increasing the cost/tax. In other words, the government is making the insurance companies levy a tax and block the political heat.
2. Determining how much addressing each health difficulty is worth works best on a case-by-case basis, and when somebody else is forced to pay for the remedy, nobody in the chain from provider to patient has significant incentive to make actual, often difficult decisions, thus driving up costs all around.

But, as I said, there's a firewall against political heat built into this practice, so the politicians will keep doing it until we all decide to reassert basic principles of good governance.

The Mindboggling Contortions of Nanny Staters

Beyond her many ways of saying "raising taxes" without saying "raising taxes," note the convoluted language that this advocate of poverty uses to confuse voters (emphasis added):

Kate Brewster, executive director of the Poverty Institute in Providence, which analyzes tax and budget policies on behalf of low-income people, said, "State leaders need to take a balanced approach to solving our financial problems, which includes carefully reviewing our tax policies. We agree with RIPEC that the state should avoid a piecemeal approach to tax policy. However, there are several reasonable policies that could be enacted that would generate much-needed revenue in a fair and responsible manner, such as ending corporate giveaways, modernizing our sales tax and considering the hundreds of millions of dollars we forgo each year through tax expenditures."

Would any casual reader understand that not forgoing expenditures means raising taxes? Hopefully a reader who does will understand that, by Brewster's reasoning — which, to be fair, appears to have been the dominant perspective of those who determine Rhode Island's budgetary and spending policies — every dollar in the private economy is ultimately just tax revenue that the state chose not to collect and every decision not to collect it is an "expenditure."

Here's another interesting tidbit from the same article, by the way:

Taxes paid by businesses in tax year 2008 amounted to 5.7 percent of the state's gross state product for that year, compared with 4.2 percent for Massachusetts, 3.7 percent for Connecticut, and a national average of 4.9 percent. "We have a very heavy business-tax burden," Simmons said.

We must stop this now, or everybody who remains in the state of Rhode Island is going to suffer, the poor and working class most of all.

The President's Fortune for Flood Relief

Be sure to listen to this 49 second Allison Gaito report on federal funding for disaster relief. As if striving to outdo Sen. Sheldon Whitehouse's bumbling use of metaphor, Congressman Patrick Kennedy declares:

What is more important than having the President here is having his money here.

I'm surprised the local media hasn't made more of the news that President Obama is dipping into his private fortune to help victims of the flood. Unless, of course, Patrick meant that taxpayer dollars actually belong to the president.

The Obama-Era Binge

One gets the sense, watching state and national politicians in action, that paying for things is by far a secondary or tertiary consideration. As Ed Achorn puts it:

The government will borrow 40 cents of every dollar it spends this year. Under the most optimistic scenarios, borrowing will continue at historically high levels, putting a severe strain on the dollar and either dampening or devastating the economy. The federal debt will rise to a chilling 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.

Most politicians and most of the media do not pause to consider such things. They prefer happy talk about growing government through clever (often corrupt) maneuvers and passing out public dollars as if they were candy. If pols dwell at all on how to pay for it, they cite budget figures that are based on transparent gimmicks or they advocate taxing that man behind the tree. But nobody seems to be very seriously engaged in the unnerving development that we are aboard a runaway train and we’re rapidly running out of track.

Big-government spending is self-feeding, inasmuch as the recipients of the dough are sure to vote for the people handing it over to them. Our only hope, it seems, is for folks with less direct incentive to get involved and push governance back toward status as an adult activity.

Pulling Back from the Entitlement Cliff

Andrew Biggs reviews the reckless state of our national entitlement, with this bit pointing toward something that I've been thinking might be the wisest approach, financially and socially:

Meanwhile, New Zealand offers a flat universal benefit to all retirees, with voluntary "Kiwi Saver" retirement accounts providing additional income. Such a setup would be a significant change from our current system, but would allow us to give the household of every retired and disabled worker a poverty-level benefit with a payroll tax of under 6 percent. A reform that effectively eliminated poverty for retirees and generated income above the poverty level by means of individual savings would be good policy, and might even be good politics.

As I've suggested before, with respect to healthcare, every American should have some sort of account with some very limited rules, into which they and others could contribute toward healthcare and retirement. If it helps for the government to issue the account with a person's Social Security number, then that'd be fine, but government involvement would pretty much end there. Over a person's life, he or she could contribute money from payroll, tax free, the government could provide whatever minimum benefit we all decide is appropriate, and employers, charities, family members, whoever, could add money, as well. The accounts could be partitioned — part for healthcare and part for retirement — or that could be left up to the owner.

The most important part of the switch would be that the person would pay directly for healthcare services and save directly for his or her own retirement. And, unlike current entitlements, upon the person's death the remainder would be inheritable, giving lower-income families assets with which they could improve their lot over time.

Big Business v. Big Government on Healthcare

Big Business learns that Big Government giveth and taketh away:

On Capitol Hill and in the White House on Monday, Democrats were fuming over a series of announcements that started Friday from Fortune 500 firms saying their bottom lines will take huge negative hits because of changes in tax law mandated by Obamacare. That hit in turn means lower profit projections. Caterpillar estimates, for example, that Obamacare will cost it $100 million; John Deere faces expenses of $150 million; 3M, $90 million; AK Steel, $31 million; Valero, $20 million. And then there's AT&T, which is marking its balance sheet down by a whopping $1 billion. All in all, the Wall Street Journal estimated a $14 billion haircut for these corporations.

Under post-Enron accounting rules, the corporations were required to revise their projections to account for the effect of Obamacare on their bottom lines. The effect is negative because Democrats, in their zeal to raise revenues and improve Obamacare's claimed effect on the federal deficit outlook, took away a tax break these companies needed in order to supply prescription drugs to their retirees. The tax subsidy, itself a government accounting ruse crafted in 2003 by the Republican Bush administration to dissuade corporations from dumping their retiree drug benefit programs on the then-new Medicare Part D, becomes taxable under Obamacare. Corporations are now being reminded of the harsh truth: What Big Government giveth, Big Government taketh away, too.

What Profiteth a Non-Profit to Advocate Big Government?

I concur with Marc that seeking to compensate for horrendous government spending, taxing, and economic policies by squeezing money from non-profits would be shameful. We shouldn't let the news cycle revolve, however, without noting the significant overlap between the non-profit community and the segment of the population that advocates for the very policies that are sinking the state.

Every time somebody demands charitable assistance from the government, whether effected as a mandate or revenue, that person is demanding a shift in responsibility from private citizens to the government. Once the structures are in place, the government considers that it owns the cause. Heed well the parenthetical note from the article to which Marc links:

Aside from health facilities, Rhode Island law also grants tax-exempt status to churches, Little Leagues, public and private schools (Costantino noted that public schools and universities probably wouldn’t be affected by any proposal), and afterschool programs such as the YMCA.

First the government is a partner. Then it's competition. Then it gives itself unfair advantages. And ultimately, the same organization that extracts money by force of law for taxes is the same organization that grants college loans, manages the healthcare industry, maintains a criminal justice system, maintains a military, and determines how much help people deserve, what sorts of strings ought to be attached to that aid, and what social agenda ought to be furthered by the charitable process.

Feeding the Beast: General Assembly Looks to Take a Bite Out of Non-Profits

"Desperate times call for desperate measures", right? So now we learn that the RI General Assembly is looking at taxing non-profits to earn more "revenue." The method will be via suspension of the tax-exempt status by removing the sales tax waiver that non-profits receive (the GA isn't considering property taxes or taxing donations...yet). According to the Steve Peoples' story in the ProJo, this will effect 6,600 nonprofit organizations, including churches, hospitals, private schools, youth sports leagues, PTO's/PTA's and the YMCA among others.

It's obvious that the General Assembly has done a poor job of managing state revenue and has made poor choices in what it prioritizes for spending. I'm also sure there are those who will argue that hospitals and private schools and the larger non-profits that proliferate in this state can afford to be taxed. But what about the Parent-Teacher groups and sports leagues and any number of smaller non-profits? Many of these groups help fill the gaps caused by budgetary oversights and misplaced priorities that have trickled down from the General Assembly into our cities and towns.

For instance, with more education dollars going towards personnel costs, it is up to the Parent-teacher groups to pay for programs--field trips, assemblies, etc.--that once were funded by the school districts. In Warwick, youth sports leagues help keep Jr. High age kids on fields because Warwick schools don't offer organized sports. Levying the sales tax will leave less money to spend on an event at a school or available for financial aid to help a kid from a poor family play ball with his friends.

Then there are animal shelters and soup kitchens and hundreds of other small groups of people giving of their free time to do what they can to help the community. They didn't expect the government to help pay for things, but asked instead to be left alone and given a tax break in recognition of the good works they perform. These groups certainly didn't expect to be taxed for giving a helping hand. This really is shameful.

Owing Uncle Sam

It seems like such a small step, and obvious, too:

Students and families who borrow money to help pay for college will see sweeping changes as a result of federal legislation approved by the House on Sunday night.

Although the bill was focused mainly on health care, it contains key provisions involving loans for higher education — including the Stafford Loan for students and the PLUS Loan for parents.

Under the bill, all such federally backed loans will be issued directly by the U.S. government, through the colleges and universities themselves, effective July 1.

See, up to now, a significant number of loans have been handled through private entities, so although the money came from or was backed by the federal government, they took a couple of percentage points of interest to process paperwork (as Neil Downing puts it). All the change — somehow passed along with the healthcare power grab — does is to cut out the middle man. But from a statist's point of view, just about everything and everyone is a "middleman"; all rights and activities ultimately come from the government. When statists' wish to engage in some form of charitable activity (by their definition), the most efficient way will always be through the bureaucracy that controls everything.

I can offer testimony that college loans are like an entry drug to debt. With a bachelor's degree becoming a baseline for jobs that have no practical need for higher education, the loan used to acquire one is like a mortgage for your career, and the government now holds every string. The government approves the loan. The government enforces laws related to debt. And, as President Obama has made clear, owning the debt, the government can opt to forgive it for those who enter preferred occupations, such as "public service."

We were already heading into an era of new indentured servitude over debt. We now know to whom we'll be indentured: Uncle Sam.

The Fly Trap's Lure

This thought, from a review of a posthumous book by Jean-Francois Revel by David Pryce-Jones (subscription required), strikes me as particularly timely, today:

A couple of years after Furet's book, six equally reputable scholars published The Black Book of Communism, detailing how the experiment of Communism had cost about a hundred million helpless people their lives. It fascinated and appalled Revel that this book, in contrast to Furet's, was not well received but criticized as unnecessary, "visceral" again, somehow too much. Revel's conclusion from this strange example of double standards was that freedom is too demanding for some people and they will hanker after Communism even though it has irrefutably demonstrated its moral, political, and economic bankruptcy. The Left, in short, still refuses to treat centralization, a command economy, and equality of social outcomes as the impediments to freedom that they are.

Freedom naturally entails a certain degree of risk, and there will always be those who prey on fear of that risk to gain power for themselves or desire, for charitable reasons, to prevent it in the first place. Humanity is so constituted, however, as to long for freedom, and using the force of government to restrain it in broad, comprehensive strokes will inevitably have consequences far greater than an individual's choices possibly can.

Government Keeps Its Fingers Clean, but Collects Junk

Undaunted by Monique's earlier quotation of the happy right-wing scribe, I'm proceeding with plans to not a recent essay by Mark Steyn, highlighting the peculiar way in which politicians manage too often to remain blameless for the damage that their policies cause. After describing a government program to install electrically dangerous foil insulation technology that burns down houses and kills installers, Steyn notes the quick defense of Environment Minister Peter Garrett, formerly lead singer of the band Midnight Oil:

... As Australia's Deputy Prime Minister, Julia Gillard, breezily told a TV interviewer, "Peter Garrett can't be in every roof in this country as insulation is being installed."

They never are, are they? Likewise, the European Union grandees and eco-poseurs of the US Congress who mandated sudden, transformative increases in "biofuel" production and at a stroke turned the food supply into part of the energy industry and made grain more lucrative as fuel than as sustenance weren't there in Haiti, Indonesia, Ivory Coast, Pakistan, Mexico and even Italy when the food riots broke out. Nor was Al Gore able to be up there on every one of California's 14,000 abandoned wind turbines. They're not entirely useless, not if you're an ornithosadist who enjoys seeing our feathered friends sliced and diced by the Condor Cuisinarts.

These are the "green jobs" that Barack Obama says will both save the planet and revitalize the economy: electric Zambonis, foil insulation, wind turbines, corn-powered cars. They will put America back on the cutting edge. In reality, like the spiked cutting edges of the electric ice-resurfacer, they'll leave the economy full of artificial speed-bumps that, when not actually sending you crashing to the ground, will make it harder and harder ever to get going.

Environmental mania is just another manifestation of the madness currently overtaking Western civilization and subsuming our freedom. On a daily basis it's increasingly clear that if our society is to survive as anything recognizable as such, all levels of government must be reset, like a computer brought back to its factory settings, removing all of the junk that piles up in dark corners of the hard drive and quirks that slow the system down.

The Unwelcome Job Creation that Would be Engendered by Healthcare Reform

... points out Mark Steyn.

Meanwhile, Obamacare will result in the creation of at least 16,500 new jobs. Doctors? Nurses? Ha! Dream on, suckers. That’s 16,500 new IRS agents, who’ll be needed to check whether you – yes, you, Mr and Mrs Hopendope of 27 Hopeychangey Gardens - are in compliance with the 15 tax increases and dozens of new federal mandates the Deemocrats are about to “deem” into existence. This will be the biggest expansion of the IRS since World War Two – and that’s change you can believe in. This is what “health” “care” “reform” boils down to: Fewer doctors, longer wait times, but more bureaucrats.

Oh, goody. Not more doctors - more regulators.

The Bucks Are in Busing

And for today's Astonishing but True:

The highest-paid municipal employee in Madison, Wis., is bus driver John E. Nelson, whose salary last year totaled more than $159,000. Half a dozen of his fellow drivers also earned in six figures. How is this possible? The Wisconsin State Journal explains: "A high base salary and other benefits for drivers were largely set in the 1970s and 1980s, when the city took over the bus com­pany." Combine that with generous, federally mandated leave provisions that make for lots of overtime, and it's not unusual for a bus driver to out-earn the mayor (and with much better job security).

Government Can't Just Dictate Reality

I certainly don't want any of my family's regular expenses going up. Indeed, if I were able to dictate terms to companies who provide me services, I'd lower my rates. But that's not how the world works. Of course, one doesn't get the impression that government officials comprehend such mundane observations of reality.

Rhode Island's Health Insurance Advisory Council, for example, in considering insurers' requests to increase their rates, acknowledges that "most of the proposed increases result from growing hospital and pharmaceutical costs." But the body can only think to posture and demand more squeezing from the companies. Several candidates for public office who put in an appearance at the hearing had nothing additional to offer:

State General Treasurer Frank Caprio, a candidate for governor, offered the council "an update from kitchen tables across the state." He said bills are piling and people are forced to cut back. "I respectfully ask you to say, 'Enough is enough' to these insurers," Caprio said.

Lt. Gov. Elizabeth H. Roberts, a candidate for reelection, acknowledged that medical inflation was the underlying problem, but urged Koller to push insurers to develop proposals for dealing with it. "We need to put the challenge on the table," she said.

State Sen. Leonidas P. "Lou" Raptakis, D-Coventry, a candidate for secretary of state, suggested linking health-insurance premiums to the consumer price index.

Why is nobody proposing the clear solution to the problem of increasing in-state health insurance? Look, our mechanism for dictating terms to those who provide us services is to find another provider willing to agree to them. A market of just three insurers is clearly not enough, so we need to bring others in. To do that — and to enable them to keep down costs — we've got to lighten up our mandates and regulations.

Unfortunately, we're learning that the one thing that Rhode Island's ostensible leaders will not consider is decreases to their own authority. That's why we have to apply a political version of the Central Falls high school "turnaround model": Vote them all out of office and reelect no more than the one percent or so who might have something resembling a clue.

Asserting Humanity by Little Steps (Literally)

Even apart from the political point, Mark Steyn's most recent last-page essay for National Review is worth a read for the scene that the anecdote presents.

Hurting a Dedicated Constituency

In an article about the ways in which Democrats' preferred policies hurt black Americans, Kevin Williamson emphasizes union racism and especially the minimum wage:

THE first answer many economists will give to that question is: the minimum wage. Milton Friedman, a Nobel laureate who spent much of his career showing how government programs reliably end up hurting those they are intended to help, was scathing on the subject, calling the minimum wage "one of the most, if not the most, anti-black laws on the statute books." And he's not alone: Acongressional survey of economic research on the subject, "50 Years of Research on the Minimum Wage," has a string of conclusion lines that read like an indictment, the first three counts being: "The minimum wage reduces employment. The minimum wage reduces employment more among teenagers than adults. The minimum wage reduces employment most among black teenage males." Other items on the bill: "The minimum wage hurts small businesses generally. The minimum wage causes employers to cut back on training. The minimum wage has long-term effects on skills and lifetime earnings. The minimum wage hurts the poor generally. The minimum wage helps upper-income families. The minimum wage helps unions." Helping the affluent and high-wage union workers at the expense of the young, the poor, the unskilled, and small businesses: That amounts to a lot of different kinds of injustice, and it also amounts to a wealth transfer from blacks to whites. ...

And it's not just that the minimum wage prices some low-productivity workers out of the labor market: It's that it prevents entry into the labor market in the first place for the most marginal would-be workers. If Will the candy hustler's real economic output is worth $6.67 an hour, his implied wage on the subway, he's unemployable with a $7.25 minimum wage. He can sell candy on the subway, but he can't sell candy for Big Candy Corp., make connections, learn what it's like to go to an office every day and have a boss, get references, get promoted, and sign up for the tuition-reimbursement program. And that, not the paltry lost income of a minimum-wage job, is the price he pays. Very few American workers actually earn the minimum wage--about 1 percent, in fact--but the minimum-wage job is a gateway into the labor force for many young workers. The value of your first job isn't the money you earn from it: It's your second job, and your third. With the right experience and network, a candyman like Will can do well for himself. But without that first job, he has a much higher chance of becoming a statistical blip on the long-term unemployment charts than a middle manager at Hershey or a salesman at Cadbury.

Perhaps for reasons of length, Williamson doesn't even touch on the deleterious effects of liberal social programs (from the welfare state to easy divorce to abortion on demand) and extra-statutory principles (like identity politics) that have destroyed family structures in minority communities. If the Ku Klux Klan had called grand meeting in the middle of the last century to contrive a national conspiracy that would effect long-term evisceration of blacks' progress, the bigots could hardly have done so more effectively than the American Left.

The International Noose Tightens

How long, do you suppose, until history encounters its first global totalitarian regime?

U.S. Rep. Barney Frank said a bank tax and other tough new measures would be introduced by the individual countries but in a coordinated way to prevent bankers from moving from one place to another to escape regulation.

"Lenin might have been able to put socialism in one country, but tough bank regulation in one country ain't going to happen because we will lose people," said Frank, a Massachusetts Democrat who heads the U.S. House Financial Services Committee, a key spot for any American decisions.

Expect "coordination" to expand in the authority that it entails and in the issues that it covers. This really is the sort of thing against which the United States should stand, on the global scene. Sadly, our current regime is likely a driving force behind it.

That also implies the possibility that the rest of the world will allow us to go first so as to drive our businesses away and then curtail their own enthusiasm.

Towns on the Teat, Too.

This article is a few weeks old, but I've been holding on to it because the statement contained therein really requires philosophical correction:

One by one, mayors and municipal managers from Cumberland to Westerly told the House Finance Committee on Thursday that the midyear aid cuts proposed by Governor Carcieri will wreak havoc on local services and tax rates, shifting a state budget crisis onto the backs of municipal employees and property owners already feeling the bite of previous state-aid cuts.

If the towns and cities have allowed themselves to rely heavily on the state for financial support and the state is having a budget crisis, then the crisis isn't shifted, it's shared. We should expect our municipal leaders to be more self-motivated, active, and demonstrative than welfare queens.

What really irks me about the attitude expressed in the article, though, is the degree to which government operates as if behind a wall of glass. Mayors and managers shouldn't be wasting time on their knees at the state house. Even were groveling successful in staving off cuts to "state aid" this year, circumstances are only going to be more dire in the next budget unless things change dramatically in Rhode Island.

In other words, officials should be turning to the people who elected them (or who elected the people who appointed them), explaining what the state must do to turn things around, and more importantly, encouraging residents to get involved — not to join in the groveling, but to run for office and join taxpayer groups and the like. After all, they pay the taxes whether it's to the town or the state, and when revenue improves for the state, it will improve for the municipalities, as well.

Of course, this assumes that municipal leaders have a clue about what might save Rhode Island — an optimistic assumption if ever there was one.

Again: It Wasn't Stimulus; It Was a Government-Insulation Program

We've argued multiple times, 'round here, that the federal government's approach to "stimulus" — especially as defined by President Obama — was not, in fact, designed to stimulate the economy and yield job growth. Rather it was designed to insulate government structures from the effects of an economic recession... at the expense of the economy. In case you missed it, here's one more bit of evidence from recent weeks:

A federal spending surge of more than $20 billion for roads and bridges in President Barack Obama's first stimulus has had no effect on local unemployment rates, raising questions about his argument for billions more to address an "urgent need to accelerate job growth."

An Associated Press analysis of stimulus spending found that it didn't matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.

As Rhode Islanders who follow state and local politics should be amply able to attest, such infrastructure money from the feds only serves to take the pressure off lower tiers of government, which tend to neglect obvious, necessary expenditures in favor of less popular, more ideological ones. They typically float bonds and create targeted taxes to accomplish the building and repairs that must obviously be done for the good of the local society, but in the current environment, taxpayers were likely to resist either strategy, requiring governments to cut back on other areas of spending.

The "stimulus" money, in other words, didn't create any new work. It merely enabled continued profligate behavior. And the reason it "only barely helped the beleaguered construction industry" is that the government has instituted policies that create high barriers to entry in order to compete for its contracts, sending the money mostly to companies that were already prepared (and expecting) to receive it.

Mandated Monitor Waste

Here's the scene: Shortly after 7:00 a.m. on a semi-rural road that locals often use to avoid a mile or so of Middletown's two main roads, the school bus pulls up to a modest split-level house, and the driver opens the double doors. A middle-school girl skips up the driveway and stops a few feet from the bus. She waits. She hooks her thumbs in her backpack straps. Motorists crane their necks to see what's going on.

Finally, first one leg then another appear. An elderly woman in an reflective vest climbs backwards onto the street. With one arm still attached to the handrail, she leans a little out of the way, and the young girl bounds effortlessly up the stairs. The bus monitor bows her head, takes a deep breath, and begins the laborious climb back up to her seat.

Now, if the people of Middletown feel that the benefit of intergenerational cooperation is worth the expense of such morning-time chaperons, then I'm hardly in a position to object. However, we have, here, a living, breathing example that the arguments proffered for a state-level bus-monitor mandate are not actually the most significant motivations. The woman in question makes no pretense of inspecting the underside of the bus for suicidal children, and were a child about to enter into danger crossing the street, or something, she would likely prove physically unable to prevent the calamity. The bus driver and the horn would be more effective.

This, folks, is one small emblem culled from daily life explaining Rhode Island's deterioration.

How the Economy Interacts with the Poor

As economic units is perhaps the last way in which clergy should consider human beings, but it's worth their while, on prudential matters, to take into account the ways in which economic principles affect charitable intentions. Unfortunately, in the quotation that Ed Fitzpatrick recently utilized, I fear Roman Catholic priest John Kiley has the mechanism reversed:

"When many of our fellow citizens are constrained by unemployment and illiteracy, and even by hunger and disease, the whole society suffers," said the Rev. John Kiley, ecumenical officer of the Roman Catholic Diocese of Providence. "Because of poverty, civilization's greatest resource, the human person, is prevented from sharing his intelligence, his gifts and his uniqueness with the world at large. Thus, mankind's social capital is depleted. Poverty makes poorer persons of us all. The elimination of poverty in Rhode Island over the next 10 years will improve the living standards of all citizens. Elevating the poor will actually enrich the prosperous."

An accurate assessment would find an organic give and take, but if the dominance tilts in one direction or the other, I'd say that it's more true that improving the economy will elevate the poor than the other way around. Prosperous people who increase their charitable giving — and, more generally, behavior — during hard times will certain reap rewards in many ways, but if the suggestion is for society to reallocate funds from the wealthy to the poor by means of government coercion, the economy will slip even farther, and the most vulnerable will wind up being harmed more profoundly and with an increasing number of fellows.

Dependency and the dilution of natural motivators for self improvement can also prevent the human person from growing and sharing. Nothing depletes social capital and human potential more surely than a government with its fingers in everybody's pockets, whether it's taking or giving.

Rule by Funding and Memoranda

I'm one of two people in the audience of an "emergency" Tiverton School Committee meeting, which was called in order to approve a memorandum of understanding from the Rhode Island Department of Education for the state's Race to the Top application, and the sense that I'm getting from the discussion is not encouraging.

Here's the upshot: School committees are under a lot of pressure to sign the MOU so that the state can prove "political will" to implement the program to the federal government. The problem is that the document that the local officials are being asked to sign is apparently not wholly inclusive of the information on which they believe they're voting. Some supposed facts are in a repeatedly changed FAQ document. Others were conveyed during in-person meetings. Some of it is in documents from the federal government. And the really-honestly-truly final document won't be released until Monday.

So, in the name of chasing after taxpayer money, the people whom taxpayers have elected to guide their local investment in childhood education are being asked to sign on to mandates and requirements from state and national officials without, as far as I can understand, even receiving assurances that the higher tiers of government will provide more money than they're requiring districts to spend.

ADDENDUM:

Here's an interesting point from School Committee Member Leonard Wright, who seems extremely suspicious of this whole thing: There is language in the memorandum that the district agrees to comply with the terms of the federal grant and a "RIDE subgrant" that apparently has not yet been produced.

ADDENDUM II:

And isn't this FAQ point interesting:

Are there "supplement, not supplant" requirements for Race to the Top?

Race to the Top contains no "supplement, not supplant" requirements.

Furthermore, the language that Mr. Wright cited about a state "subgrant" suggests to me that the state could take advantage of the lack of "supplement, not supplant" language while still imposing that very rule on individual districts.

Another point that's coming up is that the town is probably going to be subject to increasing regulations and mandates whether it signs on for Race to the Top or not. It's the old "nothing to lose" lure. But imagine this outcome: The collapsing state causes a political surge for reform, among which is the elimination of state-driven mandates... except, of course, where those mandates are part of contractually agreed grant programs.

ADDENDUM III:

The school committee has added, as a condition of its agreement, stipulations that all program requirements will be fully funded and that the funding from Race to the Top would supplement, not supplant, allocated state and federal aid to the town.

Impressions from a Declining Country

Sometimes the order in which one processes information can create broader impressions than the individual items suggest. For just such an experience, first watch Steven Crowder's short video about the crumbling, desolate city of Detroit, whose condition he attributes to the loving manipulations of big government.

Now consider this news:

Almost two months ago, the Commerce Department cheered the announcement that the third quarter GDP had grown at an annualized rate of 3.5%. The Obama administration hailed it as a sign that their economic policies had spurred real growth. Even when Commerce sharply revised the number downward a month later to 2.8%, the White House continued to argue that the lower number still meant that the US had turned the corner, even after a number of critics asked how Commerce could have missed the number so widely. ...

Today, Commerce backtracked even further. The annualized growth number for Q3 turns out to have been 2.2%, a revision of over a third from its original estimate two months ago...

... The Cash for Clunkers program and the first-time homebuyer tax credit was estimated to have contributed as much as half of the original Commerce estimate of 3.5%. Assuming that to still have contributed at least 1.5% of the final GDP, that leaves a rather pathetic 0.7% growth in Q3 without it. It's barely a recovery at that level.

And this morning, we learn:

November saw a dramatic increase in the number of houses sold in Rhode Island — up 61.1 percent compared with November 2008, according to statistics compiled by the Rhode Island Association of Realtors.

Part of the increase can be explained by a one-month-only $8,000 tax credit that expired at the end of November. Part of it may be related to the false prediction of growth. No doubt, there's also a genuine improvement of buyer mood; people who have been in the market for a home are more comfortable with the probability that prices are at or near their new bottom and that interest rates aren't going any lower. University of Rhode Island Economics Professor Len Lardaro puts it thus: "we're [now] in a typical recession, not a free-fall, like we were in a year ago."

Nowhere, however, has anybody explained what specifically is going to turn things around. Even up to the Commerce Department, it seems as if economic forecasts are taking as an assumption that 4% or so is simply "normal" growth, to which the economy will return as a function of its essential nature. The picture that is actually beginning to emerge more resembles an old car, and all variety of government officials, economists, and media cheerleaders are standing around trying various tricks and gimmicks to get the beast moving — not the least by employing positive thinking: "It's just about to go, now!" It whines and whirs and sputters, but it isn't turning over. And it's cold outside.

Of course, economic movement is only necessary for certain destinations. We can trust, for example, that Detroit will come to us. Rhode Islanders should be especially aware of the fact that, by contrast, economic turnaround and improvement must be pursued, not awaited

What Government Healthcare Really Means

Well, this about sums it up:

Far from being a brilliant plan constructed by top doctors and financial experts in a government brain trust, this health-care bill is a twisted, deformed political document, seen in its entirety by only a few high-ranking politicians belonging to a single political party. Its components have not been precisely crafted as part of a fantastic system calibrated to ensure the maximum access to quality health care for all Americans.

The bill is not being examined with transparency and careful deliberation by representatives who behave as humble servants of the people and their Constitution. Instead, it's being hastily rammed through in the dead of night, over the objection of powerful majorities of the American people, with desperate last-minute deals cut to acquire the necessary votes, financed by vast sums of taxpayer money. The primary consideration is not crafting the most sophisticated and intelligent health care reform... it's getting a bill pushed through before angry voters have a chance to blast the Democrats out of Congress. Look at it this way: if the average middle-class American paid about $5000 in federal income tax last year, then you might be one of the 20,000 people who paid for Mary Landrieu's vote, in the hope of giving Barack Obama a bill to sign as a Christmas present.

Hey, Why Don't You Just Pay Yourselves?

Didn't want to let this slip away:

In what it called a sign of progress, GM also pledged to start paying back $6.7 billion in U.S. loans. But the money will come from a contingency account full of government cash, leading critics to question just how healthy the automaker really is.

Welcome to government self-financing of its market wings, where debtors pay their loans by taking money from the lender. If the public companies can't compete, well then, they'll just make other companies' customers pay for it in taxes.

The Green Religion and Expensive Government

Just wanted to mark this final stage in the incremental establishment of the green religion as the official doctrine of the land:

New major public projects and building renovations in Rhode Island, including schools, must be designed and constructed in conformance with high-performance green-building standards, according to legislation signed by Governor Carcieri.

The law applies to new construction of more than 5,000 square feet and renovation of spaces greater than 10,000 square feet if such projects receive funding from the state. The law takes effect immediately but will apply only to buildings entering the design phase after Jan. 1. Under the law, building design must conform to the internationally recognized United States Green Building Council Leadership in Energy and Environmental Design rating system or an equivalent high-performance green-building standard, including the Northeast Collaborative for High-Performance Schools Protocol.

It almost reads like a comedic one-liner when Senator Louis DiPalma (D, East Bay Gerrymander) explains that "green building materials and systems [are] more affordable and available [...] than they used to be." Badum-bum. He goes on to assert that the investment "pays off in lower costs for energy, water and more over the life of a building," but if that's true, then the communities and organizations funding applicable projects should be easily persuaded without a state mandate.

To review: Our state is in the middle of a fiscal crisis, bleeding jobs for years on end; our government has structural deficits in the hundreds of millions in good times and bad; our communities are struggling to maintain the services that they provide; and the General Assembly and governor thought this would be an appropriate time to mandate a greater price tag on investments in public construction.

The End of the Entitlement Road

Is this astonishing video of a protest turned near riot related to a wrongfully imprisoned innocent, wanton murder of grandmothers, or government confiscation of children? Nope. It's over a proposed 32% tuition increase for the University of California system. It's a symptom of the inevitable collapse of a society built on an entitlement mindset.

Don't get me wrong. Such increases create real hardships and truly disrupt people's lives — and their plans for their lives. But intimidating administrators who have only so many dollars to allocate and declaring that it's "our university" only avoids the broader questions about how the situation came to be. What decisions have California and the United States made to create these circumstances?

UCLA Political Science Professor Mark Sawyer's point is true enough:

Sawyer said he is angry over the 9 to 10 percent salary cut he's taken because of mandatory furloughs. But he said he worries more for the status of the university system as a place for affordable education and how it will affect the "future leaders" of the country.

"I'm also worried about the mission of a public institution," Sawyer said. "It's a gateway to the middle class and to building the California economy and the nation's economy, and these institutions are where that all happens."

It might be too much for which to hope, but perhaps this era of hardship will remind Americans that they can't simply declare everything to be a priority. Either we can have loose immigration laws, or we can pay public university professors well. Either we can subsidize healthcare and retirement, or we can subsidize young adults' educations. Either we can regulate industry to the fine detail of our every preference, or we can hold open gateways to individual economic advancement. (Right-wingers will note that the protest sign pictured at the second link advertises for the AFL-CIO.)

In actuality, the long run may prove there to have been only one option, as a failure to build a self-propelling society (rather, a failure to allow it to build itself) undermines our ability to give resources away.

Backfilling the Stimulus Spending; "Who really knows?"

And in a sentence, posted by Kevin Boland, we have the perfect summary of the government stimulus program:

Ed Pound, the director of communications for the Obama Administration's "stimulus" website (recovery.gov), dropped a bombshell in interview with the New Orleans Times Picayune, stating that the Obama Administration has no idea how phantom congressional districts - such as Ohio's 00th or Louisiana’s 26th - received "stimulus" funds. The Times Picayune story reported:

'We're not certifying the accuracy of the information,' said Pound ....Asked why recipients would pluck random numbers - 26, 45, 14 - to fill in for their congressional district, Pound replied, 'who knows, man, who really knows. There are 130,000 reports out there.'

Boland goes on to describe several of the myriad examples of error, misstatement, and probable fraud associated with "creating and saving" jobs. Marc speculated, the other day, about the location of Rhode Island's lesser-known Congressional districts. At this point, what should be coming into focus for every clear-eyed American is that the "stimulus" was little more than a scam to insulate the government from the effects of the downturn. For a further indication of that reality, look to Stephen Spruiell's National Review exploration of the relationship of the Obama White House with the Service Employees International Union (SEIU):

The stimulus bill was a top priority for SEIU because it contained massive bailouts for state governments and Medicaid. As mentioned above, states such as California, New York, and New Jersey have expanded their social-welfare systems beyond what they can afford, in response to pressures from SEIU and other public-sector unions. At the same time, their progressive income-tax structures have made them especially vulnerable to boom-and-bust cycles. When the credit bubble burst, these states were looking at massive deficits, layoffs, furloughs, and budget cuts. The stimulus bill included a $50 billion slush fund for state governments and $90 billion in Medicaid expansions, helping the states avoid a necessary round of belt-tightening and tax reform.

Witness the inevitable theft that big government perpetrates against the nation's people, and unions have a critical role to play. Spruiell notes elsewhere that hospitals receiving federal money are barred from lobbying the government... but the union whose members benefit mightily from those same dollars are not.

This sort of shadow structure will not fail to emerge when a single entity is empowered with the federal government's broad control over every other aspect of the society. They'll lobby. They'll bully. They'll launder. They'll lie about their intentions and then throw together phony explanations for what they've done. They'll crush the United States for their own narrow interests.

ADDENDUM:

I've said before that among the greatest advantages of blogging to a mixed audience is that one is more likely than not to have errors or inadvertent stretches corrected. In that vein, a commenter in a subsequent post that refers to the above called me on the statement about hospitals receiving federal money being barred from lobbying the government. Going back to my initial citation, I see that I paraphrased the following poorly:

SEIU's corporate campaigns, however effective, are nothing new. Stern's real breakthrough came when he realized that labor could offer a carrot as well as a stick Around 50 percent of SEIU's members work in the health-care industry as nurses, hospital attendants, and lab techs. The facilities that employ such workers benefit from a number of government programs. SEIU's pitch was simple: Let us organize your workforce, and we'll use our lobbying power to push for increased government spending on health care.

It worked. Fred Siegel and Dan DiSalvo recently observed in The Weekly Standard that, "under the brilliant leadership of Dennis Rivera, [SEIU Local] 1199 built a top-notch political operation, and with the hospitals, which were barred from political activity, formed a partnership to maximize the flow of government revenue." The alliance has been so successful, they wrote, that New York now spends as much on Medicaid as California and Texas combined. Rivera now serves as the SEIU's point man on national health-care-reform legislation, with over 400 union staff members working full time at his disposal. Sen. Chuck Schumer called him "one of the few key players" shaping the final bill.

In essence, I joined concepts that were only related: The union offers lobbying clout, but the political activity from which hospitals are barred probably doesn't have to do with the federal dollars that the lobbying seeks, but rather with such things as bans on non-profit political activities. My understanding is that unions are not so restricted.

So, the statement in specific was incorrect, but the point remains valid. To the extent that government restrains the employer in political activity and speech, while leaving unions exempt from those restraints, the union and the government gain leverage versus the productive organizations.

Could Have Been Worse, Will Not Be Better

Unsurprisingly, Kate Brewster, of Poverty Institute fame, is inclined to cheerlead for stimulus money:

"It could have been worse" might not be an inspirational slogan, but it aptly describes the situation in Rhode Island and other states thanks to unprecedented federal efforts to fight back against one of the worst recessions in memory.

She goes on to list some big dollar amounts that have been handed out, but my mind keeps returning to her opening quotation. In the years and decades to come, we should pause from time to time to wonder whether, in those future days, things could have been better in the absence of all of that advance spending.

In Rhode Island, surely, and probably throughout the nation as a whole, we are likely to be measuring our progress in degrees of economic pain, rather than of success, for the better part of our lives. Unless, of course, we turn our nation from the path on which Brewster's ilk has set us.

What a Scam

Here's the stimulus story in a sentence: The government — in which I'm including the entire structure from the town to the nation — insulated itself from the souring economy and is now attempting to justify and perpetuate the scam by touting its own health. A little bit of basic math puts this in perspective:

Nearly 650,000 jobs have been saved or created under President Obama’s economic stimulus plan, the government said yesterday, and the White House declared the nation on track to meet the president’s goal of 3.5 million by the end of next year.

A $787 billion program "creating or saving" 650,000 jobs comes at a price of $1.2 million per worker. Alright, fine, the whole amount hasn't been spent, yet. But look at it this way: The federal government could have given 650,000 people the nation's median income of roughly $52,000 at a total cost of $33.8 billion. For $50 billion, the government could have given one million Americans $50,000 and said, "You've got a year to figure out a way to make a living."

It's a matter of plain deduction to observe that a lot fewer people must be getting a lot more money thanks to government action.

Of course, as I began by implying, the audience of the government's self-congratulations isn't the group of people whom it merely represents. Rather, the government is advertising its success for the benefit of its real clients: its various codependents. Look to some of the details in Rhode Island:

Nearly all of the 1,489 jobs created or saved through the state's allocation of funds were in three areas: corrections, education and labor and training. ...

"There aren't a lot of sustainable jobs in those numbers," [gubernatorial spokeswoman Amy Kempe] said.

Transferring money from productive, economy-growing segments of the population in order to maintain the government workforce at a cost of over a million dollars per job is a teetering model.

An Argument for the Second Amendment

Sometimes news out of Europe suggests the possibility that another revolution may be coming, such as this story from England:

On Monday afternoon, the mother gave birth to a girl by Caesarean section.

And 28 hours later, social workers arrived at the maternity ward to take the baby into care, after serving child protection papers on the patents.

Yesterday morning, a meeting of the Children’s Panel of Dundee Council decided the three youngsters still living at home should also go into care.

They are expected to be removed from the family home before the end of the week.

The family called "social services" over one child's developmental problems, and the government turned around and imposed weight limits and exercise regimes. (A picture of the family shows them to be heavy, but hardly unbelievably so.)

As Mark Steyn notes, the children are being take based on social worker "fears" of what their future "might" entail, and measuring parents on a literal scale is not many steps removed from assessing them on other grounds. Unhealthy can be a state of mind, and if the government controls healthcare, and if (through the efforts of Congressman Patrick Kennedy) it defines and covers emotional and intellectual well being, bureaucrats and social workers might not see much difference between being overweight and being, say, religious.

I'll tell you this: Any social workers who come to take my children away had better come armed, and everybody who approved the decision on up the chain of command had better lock their doors. If this is the government's wing under which our society is preparing to nestle, it would be an act of patriotism — of moral imperative — to cut it off.

Michigan: No Free Babysitting allowed!

Common-sense government at work:

Each day before the school bus comes to pick up the neighborhood's children, Lisa Snyder did a favor for three of her fellow moms, welcoming their children into her home for about an hour before they left for school.

Regulators who oversee child care, however, don't see it as charity. Days after the start of the new school year, Snyder received a letter from the Michigan Department of Human Services warning her that if she continued, she'd be violating a law aimed at the operators of unlicensed day care centers.

Under state law, no one may care for unrelated children in their home for more than four weeks each calendar year unless they are licensed day-care providers. Snyder said she stopped watching the other children immediately after receiving the letter, which was well within the four-week period.

Hints of Things to Come with Public Healthcare

An interesting find by Joseph Bottum. Belmont Abbey College, an institution sponsored by Catholic monks, opted to remove provisions for abortion, contraception, and sterilization from the healthcare plan that it offered employees, as it must do as an institution run by believing Catholics. The matter will end up in court, but the Equal Employment Opportunity Commission chimed in with this specious ruling:

Now, after a complaint was filed by eight faculty members, the U.S. Equal Employment Opportunity Commission has ruled that Belmont Abbey is discriminating against women: "By denying prescription contraception drugs, Respondent is discriminating based on gender because only females take oral prescription contraceptives. By denying coverage, men are not affected, only women." Should the college and the faculty members who filed the complaint not be able to reach an acceptable settlement, the EEOC can file a lawsuit against the college in federal court.

Apart from setting an apparent precedent that any medical procedure relevant to only one gender must be covered on the grounds that the other gender isn't affected by lack of coverage, the ruling contrasts explicitly with North Carolina law. An unelected federal board, in other words, is attempting to assert its authority above elected representatives at the state level.

This is one of those topics on which we must remind the ruling political faction that they will not always rule (no matter how confident "progressives" are that things will always move in their direction). Removed from all ideological specifics, the size and reach of the ever-growing federal bureaucracy cannot be otherwise than a suppressant of freedom.

Vlog #8: What They Want to Suppose

My vlog, this week, addresses a thread through our Congressional delegation's healthcare forums, indicative of their worldview and illustrative of the problem with with progressive thought, generally:

I'm curious how many people could explain the vlog's title without watching to the end. (Actually, probably only those within a pretty narrow range of television experience will recognize the phrase, even having watched the video.)

The Public Sector Can't Have It All

Comment-section conversation to the previous post, and to the prior post on the same op-ed, brings to mind the basic philosophical problem with public-sector labor, these days. It was once cliché to think of government jobs as akin to government bonds. The work (or the investment) isn't going to make one rich, but it is characterized by reliability.

Over the past few decades, especially in Rhode Island, the reliability of raises and other remunerative increases has made the public sector lucrative as well as secure. That's simply not a sustainable model, and it can't do otherwise than spark backlashes.

Salary Caps as Barrier to Entry

Whereas I focused on the likelihood that international governments' participation would ultimately exacerbate the problem of "too big to fail" and risk taking among large banks, Matthew Lynn argues that the big banks will leverage salary caps to hinder the one thing that could truly restrain their pay and risk taking — namely, competition:

They are talking their own book. Any controls on the financial industry will only make the existing big firms more profitable, and make it harder for new competitors to emerge. The people with most to gain wouldn’t be the general public. It would be banking CEOs such as Ackermann and Blankfein. ...

It would create an effective cartel among the main, established investment banks. They wouldn’t have to worry about their best staff being poached by a rival bank offering a better deal to the star traders. That would be banned. It would, at a stroke, transfer power from the staff to the managers.

Hopefully we won't have to find out how large a scale of damage can be done when the government-big-bank system that the internationalistas are pursuing experiences inevitable failure.

Socialism Goes Global

Without going into details, I'll say that I've got reason to be especially averse to news about exorbitant salaries for banking executives, but the international structure for market dictation that they're proposing to build to control the salaries of the ultra-rich will prove to be a ratcheting constrictor:

The treasury secretary said the G-20 countries had reached a consensus on the "basic outline" of a proposal to limit bankers' compensation by the end of this year. He said it would involve setting separate standards in each of the countries and would be overseen the Financial Stability Board, an international group of central bankers and regulators.

Until now, European countries had pressed harder than the U.S. for limits.

"We want to have very strong standards to limit the risks that compensation practices" encourage, Geithner said.

The issue of compensation has been one of the more difficult ones facing the summit.

Europeans in particular pressed for strict limits on salaries and bonuses for executives of financial institutions to keep them from being rewarded for the risky practices that contributed to the financial crisis.

National — and now international — governments are doing nothing less than absorbing the financial sector, which will prove to have calamitous consequences. If we wish to restrict salaries and restrain risk taking, we must allow the market to exact consequences for failure and ease the path by which small competitors may flourish.

Medicaid as Boomer Inheritance Program?

Stephen Moses, Health Care Policy Fellow for the Ocean State Policy Research Institute, brings to light an easy to miss loss of state dollars:

In 1993, the federal government made it mandatory for state Medicaid programs to recover the cost of benefits paid to older people with exempt (sheltered) assets out of their estates. In research I conducted for the Health Care Financing Administration in 1988, we found that Oregon, for example, recovered 5.2 percent of its Medicaid nursing-home expenditures from the estates of deceased recipients.

The comparable number for Rhode Island is only .67 percent. In other words, Rhode Island, which recovered only $2 million last year from estates, is leaving over $13 million on the table by not pursuing this non-tax resource more vigilantly.

Whoa! Wait a minute. Isn’t estate recovery like "picking the bones of the elderly"?

Not at all. With very generous income- and asset-eligibility rules, easy ways to self-impoverish and little estate recovery, Rhode Island's Medicaid long-term care program has become, in effect, free inheritance insurance for Baby Boomer heirs. Is that really how Ocean Staters want to use their scarce public-welfare resources?

I remain in the starve-the-beast camp, but there are other sectors of the population that could make better use of this break.

The Key to Campaign Finance Reform Is Smaller Government

Doug Kendall's argument in favor of tight campaign finance controls on corporations is, essentially, that corporations are too rich and powerful (and thus would have too much ability to "buy" elections), and that the freedoms listed in the Constitution and Bill of Rights are designed for individuals, not corporations:

In his historic run to the presidency, Barack Obama broke every political fundraising record, raising nearly $750 million from more than a million contributors in 2007 and 2008. Now consider a corporation such as Exxon Mobil. During 2008 alone, Exxon generated profits of $45 billion. With a diversion of even 2 percent of these profits to the political process, Exxon could have far outspent the Obama campaign and fundamentally changed the dynamic of the 2008 election.

Looking at the numbers, it's strange that everybody's first conclusion isn't be that government shouldn't be so significant to people's lives, in a consolidated, national way, that individuals or corporations would have such mammoth incentive. Exxon Mobile, as an organization, doesn't want to spend billions of dollars on politics, so don't make it a monetary winner for it to do so.

The line between corporations and individuals when it comes to constitutional protections is as old as the United States. The framers wrote the Constitution to protect citizens and the people and never once used the word "corporations."

Early Supreme Court rulings embraced this distinction, holding that the legal rights of a corporation derive from its corporate charter, not the Constitution.

The Constitution lays out the foundation for the structure of our government, which means that any laws governing corporate charters must conform with the Constitution. And the Constitution declares that Congress can pass no laws abridging free speech, and it is implicit that political speech ought to be the most protected of all. That citizens sharing a corporate structure choose to join their resources for political purposes ought to have no bearing on that fact. That they have organized themselves thus for the purpose of economic activity is irrelevant on its face.

If corporate campaign contributions are a problem, then the remedy would be to propose an amendment to the Constitution. What we've done, instead, as part of Kendall's "progress," is to create an alternate amendment process whereby the federal legislature passes a law, the federal executive signs it, and the federal judiciary stamps its approval. The consequence is ultimately that more power — and money — flows to the federal politicians, whether individually or for use in their capacity as officials.

The Size of the Incentive

A couple of things that I've read, recently, reinforce a healthy concern about the sheer size of the aggregated pool of power that a growing government creates and the incentives that it generates. The first example comes from an article by Kevin Williamson in National Review about Congressman Barney Frank (subscription required):

Fannie Mae and Freddie Mac thought they had a shot at becoming the bond market. It was not long ago that the U.S. government was expected to be running surpluses, or near-surpluses, for the indefinite future. The folks at Fannie and Freddie calculated that this meant that Washington was going to be selling fewer Treasury bonds than it had been, and that the GSEs' bonds, with their implicit federal backing, would be able to fill the void, in effect displacing Treasuries as the new benchmark for the bond market. Issuing the benchmark bond, the GSEs would be able to borrow at the "risk free" rate, i.e. what the U.S. government pays to borrow. With a line of credit at the Treasury, the implicit backing of Uncle Sam, and the power that comes from issuing the benchmark in the all-powerful bond market, the GSEs — privately owned corporations, bear in mind — would have enjoyed a combination of political and economic power normally reserved for entities that have armies and navies. Fannie and Freddie were so sure that they’d end up stealing Treasuries' pride of place that they trademarked the name "Benchmark Bonds" and began issuing them.

It was the implicit government backing — which has the implicit power to take resources by military force — that made those dreams conceivable.

The second example comes from a First Things piece in which Reuven Brenner argues that government negligence facilitated the financial collapse. For one thing:

By accepting the rating agencies' opinions as the criteria for the amount of leverage that banks could apply, the Federal Reserve turned the ratings agencies into a quasi-official monopoly. And by securitizing trillions of dollars of structured bonds on the strength of these ratings, the financial system put the ratings agencies into a pivotal position in the economy. The ratings agencies never grasped their new roles. On the contrary, they saw their monopoly position as a license to print money by issuing rubber-stamp opinions about structured product that they neither understood nor cared to understand. Meanwhile, in the case of the federally sponsored mortgage corporations Fannie Mae and Freddie Mac, the government made it cheaper for a while for anyone to speculate in the housing market.

With the housing-related organizations, the federal government lost sight of its role by behaving as a social engineer dabbling in home ownership. In the case of the ratings agencies, the government took its eye off plain principles of economics that it ought to guard because of its belief in regulators' ability to comprehend and manipulate minute trends. The pool of power is there, glittering with the reflected light of prosperity, and is simply too much for human beings to guard, even if they are nominally accountable to voters. With all of that money and influence at stake, there's further incentive for distortion and political theater to leave others with the blame:

... relying on government and the Federal Reserve to access capital is not the same as relying on banks and other financial institutions. Bankers make decisions about who gets the loans, and on what terms, based on the ability of entrepreneurs and managements to carry on successfully. But a government's decision to finance ventures—as in the case of the auto industry—is based on political clout.

Of course, political clout sometimes passes under the name of national interest, a phrase that bankruptcy judge Arthur Gonzalez used in his opinion concerning the objection of investors challenging the administration's use of TARP money for Chrysler: He wrote that the U.S. government "made the determination" that it is in the "national interest to save the automobile industry, in the same way that the U.S. Treasury concluded that it was in the national interest to protect financial institutions."

Using national interest as a criterion for financing has allowed politicians at all times and in every country to usurp the responsibilities of the private sector. It is happening again in the United States, and without much resistance, since the public's attention has been focused on the failure of private financial institutions to correct their mistakes. This failure destroyed public trust in these institutions, especially since their mistakes were visible, whereas the mistakes of the government—without which the private sector could not have carried on with its own—were less visible.

We can and should hold private institutions accountable (in part, ahem, by enabling competition and allowing them to fail), but we also shouldn't neglect the questions of whether our rule-keeper is competent and whether it's even possible for any person or group to be up to the task of keeping rules in proximity to the lure of combined governmental and economic power.

Fiscal Non-Feasibility: Let's Focus on the Real Problem with the Green Jobs Czar (the Mission)

Stephen Spruiell over at The Corner on National Review brings up something that has troubled me for a while: green jobs cannot exist outside of the vacuum of government subsidies and mandates. In fact, he points out that their survival is dubious even with such props and cudgels.

To buy into the "green jobs" scam, you must have an unshakeable faith in the ability of the government to create a viable industry from whole cloth, because there is no commercial demand for the services these green-collar workers would provide. We don't have to guess about the future of green jobs; we can look to the ethanol industry.

In 2005, after decades of subsidization, the government finally mandated the consumption of ethanol. It upped the mandate in 2007. This, plus high gas prices, was the boost the industry was looking for. Ethanol plants started springing up all over the Midwest.

Corn prices went up to meet the government-mandated demand for ethanol. Then oil prices fell, bringing the price of ethanol down with it. The industry's profit-margins disappeared. VeraSun, one of the largest ethanol makers, is in Chapter 11. Last December, the industry asked Congress for a bailout.

Exemptions Granted to Imply Supremacy

Cardinal George Pell, of Sydney, is entirely correct that "part of the logic in attacking the freedom of the church to serve others is to undermine the witness these services give to powerful Christian convictions." Providing, say, adoption services in Massachusetts is thus defined not as something done out of religious conviction, but a secular practice that a religiously founded organization opts to pursue.

A church-based charity is no different, in this view, than a company offering a service for profit or a non-profit corporation processing charity as a means of professional occupation for its employees. Even if a religious group is filling a void, it must abide by the state's rationale for providing the service, and if it refuses to do so, well then, either the service must be ended or the state must pick up the slack.

To the contrary, says Pell:

Believers should not be treated by government and the courts as a tolerated and divisive minority whose rights must always yield to the minority secular agenda, especially when religious people are overwhelmingly in the majority. The opportunity to contribute to community and public good is a right of all individuals and groups, including religious ones. The application of laws within democracies should facilitate the broadening of these opportunities, not their increasing constraint

Modern liberalism has strong totalitarian tendencies. Institutions and associations, it implies, exist only with the permission of the state and to exist lawfully, they must abide the dictates or norms of the state. Modern liberalism is remote indeed from traditional liberalism, which sees the individual and the family and the association as prior to the state, with the latter existing only to fulfill functions that the former require but which are beyond their means to provide.

Civic involvement has been redefined as secular behavior, with the effect being that religion is a permissible eccentricity to be practiced outside of public view. Thus secularists foment the impression that the religious impulse does not increase charity and moral goodness, but is an unnecessary burden that our ancestors unfortunately attached to a feeling of fellowship that human beings naturally feel.

And if they do not feel that way (or don't express their feelings in preferred way), well then, the government must correct them. Once again, we see that government-based "social justice" is a cure worse than the disease. Actually, it's not a cure at all; it's an opiate for control while the disease festers.

Concern About the Swine Flu Crisis Mode

Does anybody else see imaginary warning signs whenever news media convey urgency related to the swine flu and its predicted resurgence with the resumption of school? Parents and non-parents alike do well to pay attention to developments on the H1N1 front, but before leaping onto the latest and greatest protections, all should seek context like this:

It is not clear whether the new virus is more dangerous than ordinary seasonal flu for children, though some health officials suspect it is. ...

Swine flu was first identified in April and is now responsible for almost all flu cases in the United States. It has caused more than 1 million illnesses so far, though most were mild and not reported, the CDC estimates. More than 550 lab-confirmed deaths and 8,800 hospitalizations have been reported.

Those statistics don't mean the new flu is worse than seasonal flu, which is particularly lethal to the elderly and plays a role in an estimated 36,000 deaths each year, the CDC says.

Cause for concern, yes, but anybody who declares that any particular action is necessary to halt certain death and the decimation of human society on its basis has an ulterior motive.

Bringing Transparent Excuses and Modern Technology to Good Old Fashioned Censorship

In 2007, President Hugo Chavez shut down a television station that was critical of him. Less than a month ago, he ordered the shut down of thirty four radio stations for the "crime" of belonging to the "bourgeoisie".

(Golf enthusiasts, check out what else is "bourgeoisie" and had to be shut down in Venezuela a couple of weeks ago.)

Listening with half an ear a couple of days ago to Glenn Beck as he was plugging [correction] DirecTV - I think; in any case, Dish Network - a company that allows you to remotely order the recording of your favorite programs on your television back home - it occurred to me, obviously in a first amendment vacuum, how convenient it would be for a dictator president to hook up all of the media outlets in his country to such a device. An offending outlet could then be easily and swifty shut down with a couple of key strokes.

That got me musing on a slightly more serious matter: what exactly is the difference between shutting down media outlets because they're "bourgeoisie" and elbowing them out on the basis of insufficient diversity or localism?

“The FCC must ensure that the communications field is competitive, generates widespread opportunities, and is open to new ideas from all sources,” said Chairman Genachowski. “This exceptionally talented team will collaborate on the policies and legal framework necessary to expand opportunities for women, minorities, and small businesses to participate in the communications marketplace.”

Though one sounds slightly more noble than the other, aren't these reasons - bourgeoisie bad, diversity good - simply a cover to accomplish the same thing: censorship and a hijacking of airwaves?

Czars Are Un-American (That's Why We Use a Russian Word to Describe Them)

It doesn't take a stethoscope to hear the reckless "what could it hurt" beat behind the creation of a "pay czar":

Q: So what happens Thursday?

A: Thursday is the last day the companies can submit proposed pay packages for the 25 highest earners at each one. At least one company, General Motors, said Tuesday it already had submitted its plan.

Q: What's next?

A: [Special Master for TARP Executive Compensation Kenneth] Feinberg has 60 days to review the proposals, then accept or reject them. He is expected to meet and negotiate with the companies during this period. He also will approve broader compensation formulas that will apply to the 75 next-highest-paid workers at each company.

Seven hundred of the wealthiest, most powerful corporate types in the United States, and the infrastructure that has heretofore granted their proclaimedly outsized remuneration, now have incentive to exert influence on a single person. It doesn't take a dyed-in-the-wool libertarian to see where this is going.

Self-Defeating Government Systems

First things first, Grafton Willey deserves a round of applause for speaking truth:

"This is a deep recession which we worked hard in Rhode Island to get into. We have to take a long-term recovery view," said Willey, who is also a managing director of CBIZ Tofias, a CPA firm with offices in Providence and Newport.

Don't let anybody tell you that Rhode Island has reached its lowly state without effort. Of course, it would be accurate to suggest that some of our problems do flow naturally from basic assumptions of political philosophy, and those intellectual problems will continue to hinder our recovery. The above-linked report from Neil Downing, for example, proclaims that the General Assembly has given employers a little boost by waiving a surtax that would have more rapidly passed on the cost of borrowing unemployment funds to them. But that doesn't mean that business owners won't see an increase in their insurance that's directly proportional to the difficulty that their operations have faced:

Thus, it is "very likely" that employers will have to pay more in regular unemployment insurance tax, starting in January, to help replenish the fund, [state Department of Labor and Training Director Sandra] Powell said.

On average, employers may wind up paying $674.50 in state unemployment insurance tax per worker next year, up from $628.20 this year, an increase of 7.4 percent, according to the agency's preliminary estimates.

Rhode Island's unemployment insurance tax rates (which are set by state law) range from a minimum of 1.69 percent to a maximum of 9.79 percent. That range of rates probably won't change for 2010, Powell said.

But some employers will probably wind up facing a higher tax rate within that range next year because of layoffs. (In general, the more layoffs an employer has had, the higher the tax rate.)

In other words, the human beings who thunk up this system managed to yoke the companies that have been the hardest hit with a higher proportion of the post facto costs of recovery, and to retard new employment to compensate for previously lost employment. I'm not saying that I could have come up with something better, but this is why government solutions are problematic. Of course, a problematic emphasis in the following likely contributes to our woes:

Carcieri proposed that the budget be amended to include the waiver. The General Assembly approved the waiver mainly because levying a surtax on employers now, amid a global recession, would not be fair, said Steven M. Costantino, D-Providence, chairman of the House Finance Committee.

The waiver is prudent, without a doubt, but the question of fairness shouldn't be more than an afterthought. Wisdom is what is required, and it's in short supply in government generally and Rhode Island government especially.

An Unstimulated Recovery

Having just read promises of impending economic recovery, readers may have a common question in response to news about the implementation of the "stimulus" program:

THE STATE HAD SPENT $254.2 million of the $1.1 billion [promised to Rhode Island] as of July 24, according to data released by the state Office of Economic Recovery & Reinvestment. Close to $207 million — more than 80 percent — has gone to help plug budget holes, although $31 million was used to increase unemployment benefits and another $5.6 million was spent to expand food stamp access.

Which URI Economics Professor Len Lardaro reinforces as follows:

"I will say, not that the stimulus is perfect, but the fact that there is so much criticism is because the economy is doing so much better. We can afford to gripe," he said.

So, if only $10.6 million has gone toward projects that do more than plug budget gaps and mitigate the experience of the unemployed, and yet the economy is recovering, why do we have to spend the millions and billions of taxpayer dollars still in the pool? One begins to suspect a scam:

Andres Carbacho-Burgos, an economist at Moody's Economy.com, notes that Rhode Island so far has received more stimulus dollars per capita than any other state, save Alaska.

There was no immediate impact on job growth, he says. But hundreds of jobs were saved as cash-strapped schools and state and local governments used stimulus funds to plug budget holes that would have caused widespread layoffs.

The government has done little more, it would seem, than redistribute wealth from the private economy — present and future — to government workers. Sure, we know you're hurting, they say, but be encouraged about how healthy we are!

The political gamesmanship from RI Democrats, of course, is to blame Governor Carcieri for failing to spend the money more rapidly, but that is the nature of government. If he'd dumped $1.1 billion on the stairs of the State House and the corruptocrats who loiter in the shadows, there, had soaked it all up, the Democrats would be pointing to him when it came time for reckoning.

Look, if you pour money into the machine of the economy, it's going to run for a bit. Not efficiently. Not in a self-refueling way. But it'll run. That doesn't change the fact that government spending is minimally stimulative, slow, and prone to fraud. The slower it is, the less stimulative it will be, and the faster it is, the more prone to fraud it will be. Moreover, it can do no more, for this inefficient and wasteful effort, than steal money from other parts of the economy, including the economy of decades to come.

Penalizing the Non-Participant: National Health Care Reform IS Massachusetts Health Care Reform

Andrew had a contemporaneous post on Massachusetts health care reform, which includes the stick of a tax penalty on those who refused to participate. Note that the stick gets bigger from 2008 to 2009. Note also that Mass' reform has not accomplished its goals, though the author provides little to bolster her conclusion that national health care reform would fix everything that ails the health care system of Massachusetts and the rest of the country.

Now, from HR3200:

SEC. 59B. TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE.

(a) Tax Imposed- In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of--

(1) the taxpayer's modified adjusted gross income for the taxable year, over

(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer.

Although

(A) IN GENERAL- The tax imposed under subsection (a) with respect to any taxpayer for any taxable year shall not exceed the applicable national average premium for such taxable year.

So the penalty equates to the premium you "should" be paying. Let's see, pay a tax penalty or pay a premium. If I chose the penalty, will I dodge this experience?

By the way, HR3200 exempts the following groups from the penalty.

(1) DEPENDENTS- Subsection (a) shall not apply to any individual for any taxable year if a deduction is allowable under section 151 with respect to such individual to another taxpayer for any taxable year beginning in the same calendar year as such taxable year.

(2) NONRESIDENT ALIENS- Subsection (a) shall not apply to any individual who is a nonresident alien.

(3) INDIVIDUALS RESIDING OUTSIDE UNITED STATES- Any qualified individual (as defined in section 911(d)) (and any qualifying child residing with such individual) shall be treated for purposes of this section as covered by acceptable coverage during the period described in subparagraph (A) or (B) of section 911(d)(1), whichever is applicable.

(4) INDIVIDUALS RESIDING IN POSSESSIONS OF THE UNITED STATES- Any individual who is a bona fide resident of any possession of the United States (as determined under section 937(a)) for any taxable year (and any qualifying child residing with such individual) shall be treated for purposes of this section as covered by acceptable coverage during such taxable year.

(5) RELIGIOUS CONSCIENCE EXEMPTION-

By Their Rhinestone Ban You May Know Them

Walter Olson, of Overlawyered, highlights Rhode Island as the base of "America’s costume jewelry industry" in his coverage of the Consumer Product Safety Commission's ban on rhinestones and crystals and has collected multiple telling details, including this one:

It doesn’t even matter whether a kid’s health is at more risk (by way of traffic accidents) from being driven to the mall to buy a substitute garment than from going ahead and wearing the rhinestone-bedecked tiara or camisole in question.

The crux of the issue, of course, is this:

To a large extent the Commission's hands were tied by the absolutist, not to say fanatical, prescription of CPSIA itself, which directs that exemptions be turned down if they could lead to "any" — not "infinitesimal", not "too small to worry about" — absorption of lead or public health risk.

Which makes consumer protection legislation a "practice exam" for healthcare overhaul, in Hugh Hewitt's words:

In short, the CPSIA is a perfect example of Congress's inability to write reasonable, coherent legislation free of devastating though unintended side-effects even in a relatively simple area of legislative endeavor.

Imagine what havoc it will unleash when Congress turns to the massive and massively complicated area of health care and begins to mandate that all or almost all businesses in America adopt certain policies and make obligatory choices. It has done so in the past with regard to important matters such as retirement savings programs and union elections, and always the roll-out of such undertakings has been difficult and marked by uncertainty and difficult questions of legislative intent. ...

... The refusal of Congress to move to clean up the mess it made with CPSIA also announces what will happen after Congress passes its magic wand over health care and blows up who knows what: nothing. Tough luck. Deal with it. They will all have campaigns to run which won't want to focus on the new laws failures and shortfalls.

The Insanity Sparkles

So, the economy is struggling, right? Well, what better time to beginning banning products that are acknowledged to be safe and for which there's an active market?

... all items for children ages 12 and under — from sneakers and sunglasses to dance costumes and denim jackets — won't be shimmering as much now that the U.S. Consumer Product Safety Commission has refused to exempt crystals and rhinestones from the latest federal consumer safety law. ...

In written statements accompanying their July 16 decision, commissioners acknowledged that even though crystal and rhinestones exceed allowed lead limits they actually pose little health threat because the lead is bound to them on a molecular level and would be difficult to leach free even if swallowed.

But they said they could not grant an exemption because they are bound by the very specific language of the new product safety law.

"Because the statute does not give us the ability to be flexible, I cannot vote to grant exclusion in this case," wrote Commissioner Nancy Nord, adding that she is aware that "there will be significant and severe economic injury to those who make and sell these products."

On the other hand, perhaps we can salvage a useful metaphor from the foolishness. Instituting a "progressive" government is a bit like swallowing rhinestones: The sparkle is alluring, although useless once it's swallowed, and the ingestion appears harmless... until it constitutes a majority of one's diet, at which point it can be extremely painful or even fatal.

ADDENDUM:

The obvious commenter quip, here, would involve a comparison of the above with my support for making prostitution illegal in Rhode Island. Allow me to respond, in advance, that such comments would miss my point on prostitution and that I'll be elaborating when I've got a moment, later.

Health Care Reform: A Roundup of the Bad and the Ugly (Sorry, very little "Good" to be Found)

A defect to suit every taste.

- Contrary to representations by the Obama administration, the proposed reform would increase not

"Reduce long-term growth of health care costs for businesses and government".

- Funding to come at the expense of Medicare; i.e., care of our seniors. In fact, the Philadelphia Inquirer, not exactly a radical right newspaper, takes it one step further.

Even in the short term, one could argue that taxpayers are looking at an old-fashioned shell game. No sooner was the ink dry on the federal stimulus package, which provided millions of dollars for care for the elderly in Pennsylvania, than Congress and the administration began to propose major cuts in Medicare.

- By its mere existence, it would indirectly eliminate private health insurance in due course.

- As it would explicitly prohibit private coverage, it would also directly eliminate private coverage and sooner than "in due course". [Thanks to commenter TomW for this item from Wednesday's Investor's Business Daily.]

Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

- It has commentators openly advocating health care rationing.

- New York's Mr. Tax Compliant has spilled the beans about the need for higher taxes to fund it. (Shhh! Wait 'til it's passed, Charlie ...)

- The introduction of increasingly more intrusive state dictates in the area of personal behavior and private decisions. Commenter Rhody has expressed skepticism. But while these are not explicitly enumerated in the bill, Justin makes a good case that they would emerge inevitably, indeed, naturally.

By "investing" in "wellness programs" as a means of lowering costs, the government would be putting the weight of the nation's entire healthcare system on individual citizens' behavior. What couldn't be declared intolerable with such a consequence as the collapse of everybody's medical care?

* * *

... it is enough simply to acknowledge that the party that pays is the party that controls and that to control a person's health is to control the person.

John Loughlin: Kennedy Vote For Cap & Tax Trade Bad for Economy AND Bad for the Environment

On June 26, 2009, Congressman Patrick Kennedy returned to the House of Representatives to cast a partisan vote in favor of the Waxman-Markey Climate Change bill known as Cap & Trade. A few days later, a blast e-mail arrived from the Congressman’s office to tell Rhode Island how proud of this vote he was. Despite the claims of his e-mail, I would respectfully submit that this poorly crafted and poorly considered bill will harm both Rhode Island’s economy and ultimately harm the environment we pass on to our children.

The bill mandates a “cap” on carbon emissions, while providing a percentage of carbon-emission “allowances” to the business sector. If the number of allowances do not cover the carbon emitted by a Rhode Island manufacturer, for example, they would either have to spend more money to retrofit their operations or purchase additional allowances from the federal government. These costs could only be met by laying off more workers or passing the cost on to you and me in the form of higher prices – or both.

More likely than not, these manufactures will simply move more manufacturing jobs off-shore to countries like India and China where the cost of doing business is significantly less.

The Heritage Foundation, a conservative think tank in Washington estimates that will translate into a loss of more than 5,800 jobs here in Rhode Island by 2012. Let’s say they’re off by 50%, can we afford to outsource more than 2,900 Rhode Island jobs in the next three years?

Further, they estimate that our economy here in Rhode Island will loose more than 530 million dollars in Gross State Product. Translation? Less money in state and local coffers to pay for
education, infrastructure and assistance to the poor and elderly – coupled with rising property taxes and rising electric bills. As President Obama said, electricity rates will “necessarily skyrocket” and those costs will be passed on “to consumers.” (San Francisco Chronicle, January, 2008)

As manufacturing industries move overseas, (with our jobs), they will be setting up shop in countries that have little or no environmental protections, meaning our planet becomes even more polluted. That’s why this bill is bad for our environment as well.

Here’s a simple but common sense alternative. Why not sharply increase domestic production of oil, natural gas and clean coal? We would use the money generated by expanded royalties from US government leases to invest directly in tax cuts for green industries, based on actual jobs created. Here are some of the benefits. We decrease our dependence on foreign sources of energy and do so immediately. We generate revenue from the carbon rich petroleum and natural gas industry and invest it directly into renewable energy produced right here in America. We grow the green segment of our economy and grow the associated jobs, without exporting our few remaining manufacturing jobs. As more and more sources of green renewable energy come on-line, we improve our environment.

There’s an old saying that a little common sense goes a long way. I believe we need to return common sense to the vocabulary of Washington, DC. It is my sincere hope that cooler heads in the US Senate will not pass this harmful House bill known as Cap & Trade and cheerfully supported by Congressman Kennedy.

John Loughlin is a State Representative from District 71, Tiverton, Portsmouth & Little Compton. He is rumored to be considering a run against Congressman Patrick Kennedy.

Heads Up, Recreational Saltwater Fishermen: Kilroy Killjoy Was Here

A bill is on its way from the House to the Senate. It would mandate that you buy an annual license at a cost of $100 $7 (seven dollars) [correction supplied by Rep Loughlin via e-mail: the cost of the license is $7.00; it would be a $100 fine if you were caught without a license] and that you keep a log of all fish that you catch. Said log would have to be presented when you renew your license the following year. If said log was not maintained, said license would not be renewed.

This fun-killer of a soon-to-be law is not entirely the brainchild of the Rhode Island General Assembly. Apparently, the federal government would have imposed the requirement for a federal saltwater fishing license, inclusive of the fishing log component, if the state did not implement a state license. It is not entirely clear, however, whether the state is obliged to charge a fee for the license or, if it is, that it has to be as high as a c-note [see correction above]. Addendum: Or that the fine has to be as high as $100. It's not like someone is counting on the proceeds of such an offensive fine for revenue. Right?

And while we're on the subject of fishy, heavy-handed regulation, it was revealed this week that President Obama would like to zone the ocean. Yes, you read that correctly: zone the ocean.

(Let's see, zone the ocean. A media that swoons over the president catching a fly. Health care reform to be accomplished by gutting existing programs. Predatory lending to be outlawed ... unless conducted by the federal government. Now I get it. We're trapped in a Saturday Night Live skit!)

The Saintly Purity of Government

So the story is that business executives and corporate boards have created a scheme of mutual backwashing that has resulted in salaries disconnected from economic reality. I'm open to that possibility, as well as solutions that open up the process to light and give tools to shareholders, but how in the world does the concept of imbuing an unelected individual with power over these decisions of the powerful respond to the insight that riches can corrupt?

The regulations followed requirements set by Congress earlier this year when it passed the $787 billion economic stimulus legislation. The regulations will limit top executives of companies that receive TARP funds to bonuses of no more than one-third of their annual salaries. But the administration also went beyond the steps mandated in the legislation.

The administration named Kenneth Feinberg, a lawyer who oversaw payments to families of Sept. 11 victims, as a "special master" with power to reject pay plans he deems excessive at the seven companies with the biggest injections of public money. Feinberg also would have authority to review compensation for the top 100 salaried employees at those companies.

Going one step more deeply, how is it that we can assert the guilt of those who run individual corporations but not fear the result of expanding power on a president who is now not only the top government executive, not only commander in chief of the military, but also the de facto head of auto companies, banks, and other financial institutions? A handful of rich people can manipulate investors to ensure their little empires, but an unprecedented concentration of power in the hands of a federal administration yields no opportunity to corrupt the democratic process?

The right-wing view of a capitalistic free market isn't that it's a divine ideal. It's that nothing else will work as well for as long — a historical observation that the left wing is intent on proving true once again.

The Next Step in Government's Ambivalent Relationship with Tobacco

President Obama now has on his desk a bill permitting the FDA to regulate tobacco.

After the bill becomes law, tobacco-product manufacturers must register with the FDA and provide a detailed product list. They also must pay user fees to cover the cost of the new regulation.

The FDA can evaluate health claims made by cigarette makers and require companies to change their tobacco products. Packets of cigarettes will have larger and more strongly worded warning labels. There will be strict controls on advertising, stopping use of the terms "mild" and "low tar."

Because, after all, tobacco use is a seriously unhealthy habit.

However, setting aside yet another unacceptable instance of goverment meddling (if you extend the definition of meddling to include outright ownership) in a private industry and looking at this pragmatically,

Since 1998, federal, state and local governments collected more than $284 BILLION in cigarette taxes and payments

So this unhealthy habit is, in fact, a cash cow for our government. They count on it to fund programs that they deem valuable.

Is it wise, then, to mess with a revenue stream by empowering a government agency to modify the product sold?

It's necessary to do so for reasons of public safety, comes the reply. Indeed, such a case can be made. But if that is so, should the goverment be profiting from an unhealthy habit practiced by its citizens?

GM: 17% UAW Stake + 60% Federal Gov't Stake = 100% UAW Control

Referring to the federal government acquisition of 60% of General Motors, President Obama stated that

the government would refrain from playing a management role in all but the most critical areas

It appears, however, that "critical" is in the eye of the beholder.

The latest self-appointed car czar is Massachusetts's own Barney Frank, who intervened this week to save a GM distribution center in Norton, Mass. The warehouse, which employs some 90 people, was slated for closure by the end of the year under GM's restructuring plan. But Mr. Frank put in a call to GM CEO Fritz Henderson and secured a new lease on life for the facility.

Congressman Frank has swiftly demonstrated one of the major perils of a government acquiring control of a business: the temptation to make operating decisions on the basis of political rather than business considerations can be overwhelming.

An Interesting Convergence of Issues

This story confounds categorization:

Eastern District of Michigan judge Lawrence P. Zatkoff handed down the decision, in a case involving an alleged violation of the constitutional separation of church and state. The issue is whether a government-owned company, AIG, can market sharia-compliant insurance products. (To be sharia-compliant, an investment vehicle must be created and structured in ways that do not violate Islamic law.) In a well-reasoned and cogently argued opinion, Judge Zatkoff refused to dismiss the case prior to factual discovery. ...

The problem with all of this public largesse is that AIG sponsors, pays for, and aggressively markets sharia-compliant insurance products. The practice of sharia finance has created lucrative advisory positions for often radical imams, who get paid to guarantee the religious "purity" of sharia-compliant products. Such vehicles typically follow the Muslim principle of zakat and donate a slice of their profits to charity. Unfortunately, many of the charities receiving these funds have links to terrorism. Mr. Murray objects to his funds' being used to legitimate and promote sharia law, when that is the same law that calls for jihad. For that matter, sharia allows Saudis, Iranians, Sudanese, Somalis, Afghans, Taliban members, and other adherents to justify the following: the execution of apostates who decide to abandon the faith; the criminalizing of "Islamophobic blasphemy"; the punishment of petty crimes with amputations, floggings and stonings; and the repression of “non-believers” from practicing their respective religions freely and openly.

On one hand, a private business should be able to develop, operate, and market whatever products it likes (provided doing so does not directly support our nation's enemies). On the other hand, AIG is not alone, now, in being a not-so-private company, and the government ought not be in the position of financing the adherence to religious law. It's a precarious balance, and the conceit of mere mortals to maintain it is apt to become hamartia.

Herman Melville functions out of context here:

So, when on one side you hoist in Locke's head, you go over that way; but now, on the other side, hoist in Kant's and you come back again; but in very poor plight. Thus, some minds for ever keep trimming boat. Oh, ye foolish! Throw all these thunder-heads overboard, and then you will float light and right.

Starboard side, we carry the notion that the government should not interfere with freedoms of association and religion. Port side, we've now hung the principle that the government can become a controlling investor in industry. Express no surprise when when find the deck taking on water.

A Missed Opportunity for a Lesson in Charity... and Independence

Marc addressed the intention of the Roman Catholic Diocese of Providence to request that its pastors advocate during Mass on Sunday for maintenance of welfare payments. Dan Yorke expressed dismay, as well.

What I find most discouraging about the initiative is its indication that the Church is misassessing (or not adequately considering) the political tides. Religious organizations are facing increasingly pointed questions about the justification for social and political exemptions when it comes to the practical expression of their faith. The most prominent example has been Massachusetts's refusal to permit Catholic Charities to apply its religious beliefs to the practice of placing children in adoptive homes consisting of a mother and a father. With the swell of the same-sex marriage movement, those questions will become demands.

What the diocese and the Church must do is to define religious organizations' position in contrast with the state — delineating distinctions of priorities, appropriate approaches, and independent value. Preaching political activism from the pulpit in the service of maintained government spending and services does not take the wise path. It affirms the principles that will smother the vitality right out of America's religious institutions.

Observing budget-driven hardship among those who rely on government services and handouts, the Church should strive to pick up the slack, not to crack the whip. The homilies that Rhode Islanders hear this weekend should not focus on asking the Statehouse's little Caesars to wield the the power of their thumbless economic hands, but on asking parishioners to target charity toward people in need, to consider hiring from among the ranks of the unemployed, especially the long-unemployed. Rather than using its structure in the fashion of a political action committee, the hierarchy should mobilize an institutional brainstorming session to determine how the diocese's own programs and resources might be leveraged for the benefit of those whom the state can no longer afford to support financially.

Stepping in to do God's work when the government cannot (or should not) will reestablish religious organizations as an important institution apart from the political structure, deserving of maximum freedom to do what they do. By contrast, not only endorsing, but advocating for statist economic policies will inevitably compromise the Church's strength when it comes to resisting the social and cultural policies on which those who deify the state will insist.

The Environment Enables the Camel's Nose in the Tent

Casual attendees at local government meetings might on occasion be stunned by the utter lack of discomfort among officials about using children to advance environmentalist principles. As with much else, the English are blazing the path to the next step down:

Children as young as seven are being recruited by councils to act as 'citizen snoopers', the Daily Mail can reveal.

The 'environment volunteers' will report on litter louts, noisy neighbours - and even families putting their rubbish out on the wrong day.

There are currently almost 9,000 people signed up to the schemes. More are likely to be recruited in the coming months.

Controversially, some councils are running 'junior' schemes which are recruiting children. ...

Luton Borough Council's Street Seen scheme encourages its 650 volunteers to report 'environmental concerns'. It is also recruiting 'Junior Street Champions', aged between seven and 11.

Primary schools could also be involved within two years.

It's one thing to train interested citizens to take relevant notes about such crimes as prostitution and drug deals, but leveraging public schools to enlist the help of children is a dangerous innovation. We've already seen decades of child-focused propaganda on environmental issues, and that's certainly had an effect on the habits of American families. Recruiting the kids to snitch on hold-outs should inflame such concerns as are mildly evoked by the phrase "government schools."

How Economic Development Should Work

Brian Bishop takes up the appropriate call to government when it comes to economic development: just get out of the way.

The last thing we need is a government-run Chamber of Commerce, a retread bureaucracy of fortune tellers picking winning businesses or sectors that will be offered state loans and regulatory absolutions. Rather, we should attract new businesses and nourish existing businesses with the level playing field of a better business environment.

You might think this is a time when we need an economic development agency more than ever. It’s not a military secret that Rhode Island is among the nation’s leaders in unemployment, a key indicator of a low-performing economy.

But it is also not a secret why. Corporate and personal income taxes are high, estate taxes are repulsive, energy costs are high, our education system produces a labor force with below-average skills, our legislature has empowered unions over management, our roads and bridges are in worse shape than other states’ at higher costs, our regulatory environment is stifling, and this all takes place in a good-ole-boy environment that breeds, at minimum, a perception of corruption.

In other words, our policies make us unattractive to business, and when you look at these problems you realize they are not to be addressed by the EDC. This systemic hostility to economic growth is brought about by the legislature and all the other departments of state government. These are the arenas where change must take place.

Of course, Jim Beale raises salient questions as we move toward implementation of necessary changes:

Does anyone believe that the Rhode Island General Assembly will enact the major structural reforms necessary to put this state on a new course — a path to prosperity for everyone instead of just their favored special interests: the public-employee unions, their relatives' state jobs, and the Poverty Institute constituency?

Does anyone believe that absent such reforms — and therefore regime change in the General Assembly — that Rhode Island will not continue its decades-long economic decline?

Marketing-Consultant-In-Chief?

Courtesy the CBS blog Econowatch.

The Obama administration appears to have reminded Chrysler about the cost of accepting government bailouts: with federal funds comes federal control.

A report this week in Advertising Age said that Chrysler wanted to spend $134 million in advertising over the nine-week duration of its bankruptcy. But Mr. Obama's auto-industry task force sliced that figure in half.

Robert Manzo, executive director of Capstone Advisory Group and a Chrysler consultant, testified at a May 4 hearing in bankruptcy court that the task force "believed that it was not feasible to not spend anything on marketing and advertising for fear of eroding the image of the brand." But, Ad Age said, the task force overruled the car maker. (Chrysler's factories will be shuttered for those nine weeks.)

Mr. Obama's Presidential Task Force on the Auto Industry includes Treasury Secretary Tim Geithner and officials from the Commerce, Transportation, Labor, and Energy departments, plus representatives of the EPA, White House, the Economic Recovery Advisory Board, and the National Economic Council. It includes no professional marketers.

This happened on Thursday; it took me four days to figure out the problem. (Yup, not always swift on the uptake.)

Say what you want about corporations, they don't generally expend advertising dollars unless they deem it necessary and then only after consultation with marketing experts. It is alarming to watch our federal government override the decision of industry and marketing experts in a clumsy attempt to manage a private corporation through a non-expert committee.

A Broader Application than Broadband

It seems to me that Frank Rizzo's reasoning in deciding that government-run broadband Internet is a bad idea applies pretty much across the board for possible government actions beyond a limited set of activities:

At the heart of the problem is this: The economics simply didn't work [in Philadelphia]. To come close to breaking even, municipal systems need to attract sufficient numbers of low-dollar subscribers to help offset the ever-swelling capital costs of building, maintaining and upgrading the network.

Typically, any wire line or wireless broadband network will cost, conservatively, tens of millions of dollars in initial investments. On top of massive start-up capital costs for initial construction, broadband networks require huge annual operating costs to pay for administrative staff, customer service, repairs and maintenance. Equipment upgrades — needed every four to five years — often cost potentially tens of millions of dollars more.

To offset these costs, municipal systems need to attract thousands of local subscribers by either drawing customers away from commercial providers or by persuading nonbroadband users to sign up.

But commercial providers generally offer more reliable and faster service — few of their subscribers are likely to switch to a slower municipal service to save a couple of bucks. And, as the Pew Internet & American Life Project has found, broadband nonusers don't see relevance of the technology in their lives, making it unlikely that a taxpayer-subsidized network would suddenly change their minds.

Government isn't as sufficient. It can rig the system. And it drives up prices for everybody outside of its offering and diminishes quality for those within.

Despite his insight, Rizzo falls back on brainstorming ways in which to make the system work:

What's really needed is not a utopian dream bound for fiscal bankruptcy, but rather a true national broadband policy that will give the nation's mayors the resources for low-cost computers, digital training, local technology centers and resources for creative nonprofits and other third parties to generate targeted online content that will foster greater interest in broadband by nonusers. When Wireless Philadelphia failed, we did just this with the Digital Inclusion 2.0 program and, as a result, more low-income residents are online in our city than ever before.

Thus does a limited effort to level the playing field and create a baseline public infrastructure for Internet access grows into the generation of content meant to generate interest in a government service. It's like government mission-creep at Internet speed.

The Fire Code Strikes Again

And the squeeze on non-governmental services — most notably from the Roman Catholic diocese — pushes another one over the edge:

The Roman Catholic Diocese of Providence has told a state nursing home association that it is closing St. Francis House, its assisted-living center at 167 Blackstone St. later this year, a spokeswoman for the association said. ...

Mary K. Talbot, of the Rhode Island Association of Facilities and Services for the Aging, said the diocese told the association it would cost $250,000 to $500,000 to bring the center into compliance with the state fire code.

WPRI has more details:

It serves 46 low-income elderly residents who require assistance with normal daily activities, but do not qualify for nursing home care.

To achieve full compliance with fire code regulation in Rhode Island, the St. Francis House would need $500,000 in immediate upgrades to the sprinkler and fire alarm system.

In addition, officials say that low reimbursement rates for patient care at the facility has caused St. Francis House to incur monthly deficits of $10,000.

Yes, many of these suborganizations were struggling already, but that's nothing new to charitable groups, and $500,000 is more than four years worth of $10,000 monthly losses.

By the way:

St. Francis House employs 22 full- and part-time employees.

Regulations Are Like Taxes

Although he isn't speaking solely about our state, Theodore Gatchel's op-ed, Sunday, presents a worthy reminder that taxation is not the only government burden that must decrease in Rhode Island:

The idea held by many politicians and government bureaucrats that simply passing a new law or issuing a new regulation will solve a problem is a common one. Unfortunately, once a new regulation is turned over to the bureaucrats who administer it, the focus becomes the regulation, not the problem it was created to solve, and common sense goes out the window. The resulting mindset also ensures that most regulations can easily be circumvented.

Whether it's in housing, healthcare, or business, a heavy regulatory hand creates a minefield — albeit one navigable by those clever enough to game the system (or wealthy enough to pay somebody else for that service). Thus do we see name changes, the shuffling (rather than mandated servicing) of patients, and a class of government officials with lapses in their tax records.

Remote Control: Good for televisions; Not So Good for the Internet

Computer and internet tech stuff is not my forte. But wouldn't it be far more effective to build (or bolster as needed) protections and barriers into critical computer infrastructure - electric, water, banking - rather than create a shut-down switch to be operated remotely and, most likely, after the infrastructure has been attacked and damaged?

Under the new bill, a national cyber security adviser reporting to the president would coordinate the efforts of the U.S. intelligence community and civilian agencies on all cyber security matters. The adviser would have the authority to disconnect from the Internet any infrastructure network found to be at risk.

Not to mention a piddly item like giving the federal government ultimate control over the internet ...

Pay for Performance: the Logical Extension

Thanks to WPRO's Matt Allen for the heads-up about the "Pay for Performance Act of 2009" bill that got voted out of Elmer Fudd's ... er, Barney Frank's committee last week. Byron York at the Washington Examiner reports.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place.

NewsBusters' Tom Blume points out why this bill is a really bad idea.

Geez, it wouldn't be much of a stretch to extend Geithner's reach to:

- Any company with a Small Business Administration loan.
- Any university with students who have borrowed money from the government to attend (i.e., almost every institution of higher learning in the US).
- Any company whose employees use government services (i.e., an interstate highway or a subsidized mass-transit ride) to get to work.

That is, it's not a very far trip to controlling everyone's earnings.

So, responding to this amazingly bad idea, Matt Allen this evening proposed a trade: we allow the government to void those contracts and retroactively set those wages; in exchange, we get to open all state and local collective bargaining contracts touched by TARP or stimulus money and adjust the compensation therein.

I would go one step further. No trade is necessary. If Barney's bill (did I mention what a bad idea it is?) does become law, it enables exactly what Matt proposes. We could reach back and retroactively adjust public employee contracts. And not just contracts that get TARP or federal stimulus money. State and municipal contracts are funded with public tax dollars, the same type of funds as TARP and stimulus money. Barney's Law could become the precedent for all states and municipalities to unilaterally revisit their contracts across the board. No trade, bankruptcy or court order needed.

As Matt said, "Who's in?"

Experience with the Darker Side of Employment

You may have noticed that my posting has been sporadic, of late. I've been going through the sort of experience that all government meddlers ought to have, and it's proven not only time consuming, but apt to scuttle deeper thoughts.

I read, somewhere, that new regulations are set to take effect that will help the unemployed to afford COBRA health insurance. To now, the way it has worked has been that laid-off employees could keep their health insurance, but they've had to pay their entire premiums (plus an administrative fee). The new (temporary) system will leave them paying 35%, with the employer covering 65%, which he will get back as a tax credit. In other words, it doesn't cost the employer, but he has to front the money for a year (during a down economy).

Well, let me tell you that a certain type of employer, already reluctant to lay people off for unemployment insurance reasons, now has even more incentive to get employees to quit than was previously the case. There's a subjective line at which an employer's behavior amounts to "constructive discharge" — meaning that no reasonable person could be expected to endure the work environment — but that's a hefty gamble when unemployment insurance and continued healthcare are on the line.

Censorship, a.k.a. the "Fairness" Doctrine, is Nothing to Laugh at but ...

... did anyone else get the giggles when they heard who is now promoting it?

"Essentially, because there's always been a lot of big money to support the right wing talk shows and, let's face it, Rush Limbaugh is fairly entertaining even when he's saying things I think are ridiculous," Clinton said. "I think the American people know now that we're in a very serious time. We all need to be questioned. The president, I'm sure, would be the first to admit none of us are right all the time and everything should be debated."

"With the future of the country hanging in the balance, we shouldn't be playing petty politics or just going for entertainment," he said. "What I think we need to do is have more balance in the programs, or have some opportunity for people to offer countervailing opinions," he said.

"When the Fairness Doctrine was done away with I was not in favor of doing away with it," Clinton said. "I never minded having somebody be heard who disagreed with me."

Setting aside the large vat of whitewashing contained in that last sentence, the former President couldn't see this as a way of getting back at some of his more "vocal" critics, could he ...?

Milestones on the Road to Serfdom

Linking to an illustrated Road to Serfdom, Instapundit Glenn Reynolds conveys a reader's question about what page we're currently on. Of course, one must take into consideration, as Michael Ledeen does, that American fascism is likely to have some significant differences in character from that described by Hayek, but I'd suggest that we're somewhere around pages eight and nine. (Sadly, that assessment includes both Republicans and Democrats in the category of "planners.")

This paragraph, from Ledeen, struck an uncomfortable chord for me, having recently observed many state and local "leaders" casting their eyes to Washington for salvation:

The metaphor of a parent maintaining perpetual control over his child is the language of contemporary American politics. All manner of new governmental powers are justified in the name of "the children," from enhanced regulation of communications to special punishments for "hate speech;" from the empowerment of social service institutions to crack down on parents who try to discipline their children, to the mammoth expansion of sexual quotas from university athletic programs to private businesses. Tocqueville particularly abhors such new governmental powers because they are Federal, emanating from Washington, not from local governments. He reminds us that when the central government asserts its authority over states and communities, a tyrannical shadow lurks just behind. So long as local governments are strong, he says, even tyrannical laws can be mitigated by moderate enforcement at the local level, but once the central government takes control of the entire structure, our liberties are at grave risk.

Any Rhode Island school committee member will complain of unfunded mandates from the feds. What they may not have considered is that, when the funding encompasses the entire enterprise, increasingly invasive mandates will follow. The same is true on the town side, as well.

Welcome to the Era of Dependency

I have a question. Once the dust settles on the big grandchildren's money drop heading the states' way, how is our failed public finance system going to maintain all of this on top of the infrastructure and assets that it currently struggles to keep in one piece?

To Providence Mayor David N. Cicilline, new federal investment in his city means streetcars.

Not the RIPTA buses with the fine wood trim that resemble trolleys. But real trolleys running on rails along city streets. He sees crater-pocked Bridgham Street in the city's Elmwood section and dozens of other neglected city streets and sidewalks finally repaved and refinished.

In Warwick, Mayor Scott Avedisian sees a new bridge over Mill Creek on Tidewater Drive, and maybe a boardwalk and a handicap-accessible pier at Gorton Pond, a freshwater pond that is a popular spot for bass fishermen and beachgoers.

In Pawtucket, Mayor James E. Doyle sees something that young city residents have been dreaming about for well over a decade: a skateboard park in the heart of the city, right across from McCoy Stadium, at Joseph Jenks Junior High School.

It's the dawn of a new era of big government, and big government spending. Millions of federal dollars are expected to come to Rhode Island as part of an economic stimulus plan.

The certainty of the windfall has inspired local cities and towns to dust off development plans, some long-held and many that may have just never had the money to begin with, in the hopes that maybe, finally, they’ll see the light of day.

Perhaps the most important whisper to heed comes from our Congressional delegation, which doesn't think the current borrow-and-spend plan is big enough. It's a sort of trap we're in:

• If the stimulus money doesn't boost the economy, the powers who be will insist that the windfall wasn't big enough, and nobody down the money-grubbing line will be inclined to disagree.
• If the stimulus money has a mild effect on the economy, the powers will say the same thing, and states will have all sort of new items and programs for which they have no real prospects of continued funding.
• And if by some miracle throwing borrowed money at the country really does revive the economy, it will be seen as having validated the principle, and the practice will be continued in good times and amplified even more in bad.

Some would argue that this monster will be something worse than ineffective.

Through it all, the spectacle of hearing officials of every layer of government, right down to small-town school committees, place their hopes and dreams in a federal check writer is evidence of that malignant addiction to receiving. Yes, it's the dawn of the Era of Dependency, and not a few paths that lead from here into the future begin the end of the United States of America.

Advertising the Dole

The front page of today's Providence Journal questions why welfare payments would decrease even as the economy worsens, and it looks to me like Cynthia Needham and her "experts" missed one explanation:

Experts attribute the decline to several factors including tighter eligibility, a potential lag time between when the economy falters and when people seek state benefits, and the fact that some newcomers might not know how to find help.

Perhaps it falls under factor #1, but I wouldn't discount the possibility that those who would seek welfare — as opposed to unemployment payments — have become outgoers from the state. Such an explanation is consistent with recent policy history:

Here in the Ocean State, for example, children were exempt from a cap restricting the amount of time they could receive cash assistance, essentially assuring that their families received some money until they were 18. That could explain in part why in 2007 Rhode Island had the third-highest number of recipients on welfare as a percentage of population in the nation, according to a report in Congressional Quarterly's State Fact Finder.

That rule changed last year when Rhode Island lawmakers, desperate for savings, voted to limit children to a total of five years of assistance.

The new legislation took effect this past october, cutting upwards of 2,400 children from the rolls that month alone.

At the time, more than half of the enrolled families had been receiving FIP money for more than five years, according to data from the Department of Human Services. One quarter had been on the rolls for more than a decade.

Newly desperate families will still have an aversion to falling into the welfare pool. They'll rightly take assistance targeted at those who are out of work and looking, but it couldn't possibly have a positive effect on our society to lure them toward the government dole.

A Creeping Emergency

It's a few days old — which in Internet time is a matter of months — but Mark Steyn's column on the mission creep of FEMA is worth a read if you haven't gotten to it, yet:

The proposition that a new federal administration is itself a federal emergency is almost too perfect an emblem of American government in the 21st century. FEMA was created in the 1970s initially to coordinate the emergency response to catastrophic events such as a nuclear attack. But there weren't a lot of those even in the Carter years, so, as is the way with bureaucracies, FEMA just growed like Topsy. In his first year in office, Bill Clinton declared a then-record-setting 58 federal emergencies. By the end of the Nineties, Mother Nature was finding it hard to come up with a meteorological phenomenon that didn't qualify as a federal emergency: Heavy rain in the Midwest? Call FEMA! Light snow in Vermont? FEMA! Fifty-seven under cloudy skies in California? Let those FEMA trailers roll!

The Cato Institute's James Bovard was struck by the plight of Vernon, Conn., a town ravaged in the winter of 1995-96 by, er, slightly more snow than they'd expected. So FEMA sent them a check for $40,023. Vernon had 30,000 people, and its town snow-removal costs that winter were $258,000. "That's just $8.60 per person," Bovard pointed out, "less than a 12-year-old charges to shovel out a driveway after a good snowfall."

So why did they need "federal emergency" aid? Because the town had only budgeted $104,516, and so claimed to be "overwhelmed" by the additional costs. They could have asked the good burghers of Vernon to chip in an extra five bucks apiece. But why bother when FEMA's so eager to give you a warm bath in the federal love nectar? The town government wised up pretty quickly. The next winter, they set the snow-removal budget at just $69,383.

Everything inches toward the federal government, it seems, because power has a sort of gravity. (Next will be the international level.) Eventually, though, you end up with an uncontrollable mass in which citizens can only suffer.

The Benefit of a Word

It's may be a small thing, but it always bothers me when the word "benefit" is used to describe welfare-type payments and services, as in:

"This is to make the system better," [Governor Carcieri] said yesterday, noting that nursing home residents could more easily use Medicaid funds to live with family or friends under the new plan. But when asked about a separate proposal to limit the "benefit package" for thousands of low-income health-care recipients, Carcieri referred questions to a department head.

The connotation of one's "benefit package" at work seems to me to be that it is an extra benefit of doing something — namely, helping to move the company forward. In the case of insurance (not necessarily of the healthcare kind), one receives "benefits" for having invested in the plan.

If language matters, and I believe that it does, we ought to come up with a new term for receiving public largess, taken under penalty of legal repercussions, based purely on perceived need. Maybe "graft."

"The fire codes are still outlandish"

So sayth Justin. And with that adjective, he understates the case.

In 2003, before (before) the new fire codes uselessly promulgated as a result of the Station Night Club fire went into effect, Rhode Island had the highest per capita expenditure on fire prevention. Imagine how much higher that number now is and how much more burdensome those regulations.

Conceptually, whether it's a fire code or a building code, we can have no end of regulations and corresponding construction or retrofit requirements to make us so safe as to approach infinity. There is a point at which the resulting cost renders the buildings too expensive to buy or rent or, minimally, places a heavy, unwarranted burden on an economy.

In practical terms, our expensive fire codes and fire prevention infrastructure proved completely irrelevant to three hundred people in West Warwick. Mountains of expensive fire codes are useless if not enforced (and if an Attorney General then does all in his power to shield the fire official from the legal consequences of such a fatal dereliction of duty).

The new fire code, built on an already excessively burdensome fire prevention infrastructure, became yet another regulatory/fiscal cudgel with which the General Assembly pounded Rhode Island businesses. Inadvertantly and with all good intention, some might point out. Yes, but weren't most of the laws and regulations - including tax laws - that have unnecessarily rendered Rhode Island all but unfit in which to operate a business pass innocently and with good intention? That in no way diminishes the considerable damage that they have wrought and continue to work on Rhode Island's economy: insufficient numbers of desireable corporations, the attendant dearth of good paying jobs, first into a recession, high unemployment rate, nightmare flashbacks for the CEO of a large corporation, et cetera.

The Business of Poverty

Marc and Matt talked Poverty Institute research last night on the Matt Allen show. Stream by clicking here, or download it.

Embrace Your Inner Underfunded Pension!

According to RI Future contributor Pat Crowley, if your pension plan is underfunded don't think of it as a bug, think of it as a feature…

An unfunded liability may in fact enhance the security of the plan because it requires more caution, therefore, more long term thinking.

Anyway, back in the reality-based community, understanding why pension underfunding is a bad thing is straightforward. A pension plan is underfunded if, according to reasonable actuarial and design assumptions, it will run out of money before all obligations owed can be paid out. This situation should be avoided not only in pension plans but anywhere else in life. Claims from defined-benefit advocates that the current underfunding of Rhode Island's public pension system does not present a serious problem severely undercut the notion that defined benefit plans can be as cost-effective as defined contribution plans, if decades of total annual contributions equal to at least 25% of employee payroll are considered par-for-the-course for keeping a defined benefit system afloat.

In terms of present specifics, the underfunding of Rhode Island's state employee pension plan means that the state is required to contribute over 20% of employee payroll next year, to help get the pension plan to point where it will be self-sustaining by 2027, while still meeting all obligations until then. If the pension plan had been fully-funded (and never raided), the required state contribution would be much smaller, probably somewhere in the vicinity of 3% to 4% of total payroll per year. Given the current size of the state workforce, the difference between 4% and 20% of payroll is about $120 million, meaning that, if the state employee pension plan had been funded in accordance with its obligations assumed, $120 million more would be available to pay for existing programs or to reduce the deficit next year.

Finally, the pension study cited in Mr. Crowley's post takes a curious approach to the concept of "moral hazard". Here is the study's explanation of the concept…

If [pension plans’] investment decisions are being distorted by moral hazard, then we would expect to see less well-funded plans adopting more risky asset allocations.

Isn't This Just Social Security on Steroids?

Possibly hoping to tap disenchantment with the recent performance of the stock market, Workforce Management reports that

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.

At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.

Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

Firstly, as with social security, is this not simply a pyramid scheme, where it becomes impossible for contributors at a certain point, probably fairly soon, to receive promised retirement funds because the kitty has been distributed to people ahead of them on the list? Or do these Congressional Democrats propose to augment this revenue by reinvesting it, say, in the stock market ...?

More importantly, given the ease with which any future Congress can switch the flow of that new, 5% tax from those "special government bonds" to general revenue, it is not possible to create a secure, credible lockbox for this proposed program. In addition to all the perfectly valid drawbacks of efficacy and logistics which will be cited, this is perhaps the most significant flaw of the proposal. No matter how loudly and sincerely current members of Congress proclaim the sancity of that revenue, "Guaranteed Retirement Accounts" will never be viewed as "guaranteed" or as an "account" by anyone even slightly familiar with Congress' track record of keeping promises in the area of taxpayer funds and other important matters.

Incompatibility and a lack of shared goals should also fuel this scepticism and resistance. With this program, millions of people would be placing their retirement funds in the hands of officials who, too often, are not guided by considerations of the long term or what may be best for their constituents but by what they think they need to do legislatively to get reelected in a couple of years.

This is not necessarily a defense of the stock market. The bursting of the bubble created by the Community Reinvestment Act (oh, look, another unnecessary crisis covered with the federal government's fingerprints) has pretty much trashed our retirement accounts. But subjecting retirement funds to our government's whim, i.e., to values and actions which are the antithesis of good retirement fund management, and then expecting to receive retirement income when we hit sixty five strikes me as untenable and ill-advised from the get-go.

[Thanks to commenter Anthony for the prodding on this subject.]

Mitigating Circumstances?

I don't know anything other than what's reported below, but this strikes me as heavy-handed, no?

A 20-year-old woman pleaded not guilty to animal cruelty charges this morning after authorities accused her of muzzling her two pit bulls and abandoning them in an apartment before she went to a hospital to give birth.

Judge Jeanne E. LaFazia in District Court, Warwick, ordered Diana Tetrault to have a mental-health screening and released her on $2,000 personal recognizance, according to a clerk.

Tetrault is scheduled to return to District Court on Oct. 24 for a pretrial conference.

Johnston’s animal control officer found one of the pit bulls leashed to a closet door in Tetrault’s second-floor apartment on Sept. 26, according to police Maj. Ralph Bubar III. At the time Tetrault was in Women & Infants Hospital after having given birth.

The other pit bull was caged in the kitchen at 28 Osgood Ave., he said. Neither animal had food or water, he said.

At the time, residents in the apartment house said they hadn’t seen anyone visit the second-floor apartment since the morning of Sept. 23.

The two dogs remain in the custody of the Johnston Police Department, which placed them at the Providence Animal Rescue League.

The Department of Children Youth and Families received notification of Tetrault’s arrest and the alleged abuse. {emphasis added}

Comparative Welfare

The Providence Journal, as represented by Steve Peoples, still isn't giving the whole story when it comes to Rhode Island's Family Independence Program:

Lawmakers spent yesterday afternoon poring through Governor Carcieri’s 101-page plan that would dramatically cut benefits to the poor, while encouraging a "work-first" model and promoting "healthy marriages."

The governor's sweeping proposal, if adopted by the legislature in the coming months, would constitute the most significant shift in the state's Family Independence Program, often referred to as welfare, in more than a decade. Carcieri has even created a new name: the Rhode Island Work First Program. ...

Carcieri wants to push low-income Rhode Islanders into the work force immediately, while the current system allows for training and education first. He also wants to cut eligibility for cash assistance from 60 months to 24 months for new recipients beginning July 1. ...

The U.S. Department of Health and Human Services reports that 28 states and the District of Columbia have 60-month time limits for cash assistance, which is the maximum benefit allowed under federal Medicaid rules. Massachusetts is one of two states that have no lifetime limit, but intermittent caps allowing 24 months of cash benefits during each 60-month period.

For one thing, Rhode Island is one of seven states that continue to give support in some form after that limit (cash for children is one example). For another, Rhode Island doesn't count time spent on similar programs in other states. And although I can't find the mention of it, just now, I'm pretty sure we're unique among those seven states in offer our 60-month lifetime limit in consecutive years.

If the General Assembly were to tweak the governor's proposal to address these considerations, that'd be a good start. But the people of Rhode Island can't rally on behalf of reforms when they don't know the specifics of what they're reforming.

Facing Reality on RI Poverty

The point's a little bit of a tangent from poverty advocates' request for more workers to make food stamps easier to claim and disperse (which always raises questions about the responsibility of the government to promote its handouts), but this closing quotation illuminates one of the indistinct areas in which liberals and conservatives move toward different solutions:

"The governor is not facing reality. We have a major hunger problem in Rhode Island" and the state is not serving enough people, [Henry Shelton, director of the George A. Wiley Center,] said.

Liberals look at increasing numbers of "hungry" Rhode Islanders and say "make it not so," meaning "give them food." This being an endemic problem, not a temporary crisis in food production, one must also offer suggestions for solving the underlying issue of poverty, and the liberal solution is, again, "make it not so," meaning "give them money," whether that directive takes the form of direct welfare payments, supplemental resources to increase the ease of working or the earnings that may be treated as discretionary income, government jobs, union organization to muscle for jobs, or legislated minimum wages and benefits.

The problem is that, eventually, the society finds itself saying "make it not so" to an avalanche in progress. Dependency becomes a habit, rather than an uncomfortable temporary necessity. Those inclined toward it will migrate in search of it. Those overburdened in its provision will migrate away. Meanwhile, the system's demands drive away businesses and generally drag the society down. The question avoided via imperative at the beginning was "what's the best way to make it not so given our circumstances," and that question quickly transforms into "how can we continue to afford this?"

Rhode Island no longer has the resources to deal with the increasing demand. That is the reality that we must face, and denying it will only increase the amount of need. Those who do the work of angels for the poor certainly have admirable priorities, but at least in degree, those priorities are shared by too few of their fellow citizens. Keep requiring, by government fiat, that average citizens contribute more than they believe reasonable, and they'll continue to leave, even as those whom the policies benefit continue to arrive.

The conservative would suggest that Rhode Island should fortify itself first. As aesthetically unpleasing and morally uncomfortable as it may be, we must get our house in order before we invite others in. That will mean giving the needy incentive to seek out states with the resources to address their needs. It will mean making the state an attractive place to live and do business for those who already have some advantages and wish to build more. Then let those in need return for the opportunity to climb, not to tread water.

I do not believe, as I may be accused of believing, that success proves value. Rather, I believe that people, as a matter of human nature, will work much more assiduously toward their own success than toward the subsidization of others' subsistence, and that they are therefore more advisably treated as an engine than a pool.

Thus, presented the prison of poverty and disadvantage, the liberal seeks to adorn the cell with such things as will make it more tolerable until freedom arrives, while the conservative wishes merely to open the door and make the society outside more apparently worth joining.

What's "Financial Aid" in Spanish?

Consider this vignette from Katherine Gregg's Projo story on Rhode Island's misuse of federal healthcare funds:

Emma Villa told the lawmakers what would happen to her, as the operator of a small day-care business in her Laban Street, Providence, home, where she looks after two children in addition to her own.

With the help of a translator, the Spanish-speaking Villa, 40, said: "It is very important that we have health care," she said, "because we are the ones that hold the entire welfare-to-work system up. If parents, children and those of us who care for them lose our health care, we could face the spread of disease without treatment — maybe even an epidemic...Is that what we really want?"

Without health insurance, Villa said she will have to look for another job and if she is unable to find one with health insurance, she will be forced to seek financial aid from the state for the first time in her 20 years in this country.

The tale of Rhode Island's woes couldn't be told with much more concision. Here's a woman who watches two children as a job (the minimum she can take and receive healthcare), who apparently can't speak English well enough to be much help to those kids in that regard, and who sees the substantial money that the state pays toward her health insurance as something other than financial aid.

Online details of state financed health insurance are spotty, as far as I've been able to see, but assuming that she's married (which perhaps can't be assumed), Villa's entire family could be eligible for RIte Care at a cost to her of $61 per month if their income is up to around $39,000 per year, or free if it is less than around $32,000. At the high end, her family could make over $70,000 per year, and she and her children would still be eligible for the Child Care Provider Rite Care (CCPRC) Program for a monthly cost of $130.

I don't know what's standard, out there, but based on the little bit of information I've found online (PDF, PDF2, and this), I wouldn't be surprised if there are Rhode Island taxpayers who make nowhere near that amount and pay $130 per week for a comparable plan.

Villa throws up the specter of an "epidemic" if the healthcare gravy train were to stop, but the real epidemic lies down the path of continued state overspending, increasing taxes, and exodus of its victims.

Well, It's a Start

Representative Kenneth Carter (D, North Kingstown/Exeter) deserves credit for putting forward one piece of the solution:

"... a humane society is concerned about all its members, including those who must pay the bill for the needier," he said. "We cannot continue to drain others dry so that individuals on public assistance are able to do nothing for five years but hold out their hand and pick up a check. We are supporting a non-working class of people for too long, and driving many of our taxpayers to the brink."

Representative Carter's solution is to put a time limit on public assistance, shorter than the five years now allowed. His legislation, (2008 - H7021), would limit public assistance to 24 months in a continuous five-year period. The initial continuous five-year period would begin on January 1, 2009, for those receiving assistance on that date, or the date that a family unit first becomes eligible for assistance.

We'll see whither this goes, but even its passage is insufficient. As any public-dime activist in the state will tell you, the cash assistance program doesn't represent the bulk of social services spending in the state.

Watch for the General Assembly to either let this one die in committee or pass some version of Carter's bill with a compensatory increase somewhere else on the government hand-out menu.

Bakst's Worthy Question

Charles Bakst presents a question that he thinks the governor ought to ask himself, and although my way of answering it mightn't be what Bakst expects, I think it's a worthy consideration:

I said Carcieri would say he wasn't calling them bad people, only that they'd made bad decisions. [URI Feinstein hunger center director Kathleen Gorman] said, "Point to me the first person who never made a bad decision in their life. I think he is calling them bad people." She termed him "very mean spirited."

I prefer not to think of Carcieri that way. He certainly doesn't think of himself that way. But if I were he, I'd ask myself: "What am I saying that's coming across wrong? How can I demonstrate I really do care?"

Bakst's first question is both silly and a bit of a trap. It's not Carcieri's presentation so much as his conclusions and beliefs that are branding him. My suggestion is that he could both prove his sincerity and highlight the inadequacy of the expected "I really do care" answer from the usual suspects by making room in his schedule for explaining his beliefs directly to the kids and adults most dramatically affected by his conclusions.

How does he demonstrate that he really cares? By speaking truth to powerless, thereby giving them more power — in the form of confidence — to make better decisions.

The Way Jerzyk's World Works

I'd like to, if I may, correct a couple of misconceptions on Matt Jerzyk's part without thereby lending credence to the parts of his post to which I don't think response merited:

... please provide me one woman in the entire state of Rhode Island who, when confronted with the reality of having a child and whether to have that child and the status of her relationship with the child's father, stops and thinks, "Why am I worried?? I can get on Welfare and life will be alllll good!" That's not how life works, folks. And I guess if Don Carcieri ever left his cushy East Greenwich neighborhood and visited the low-income areas of his state he would realize this!

The key flaw of Jerzyk's rhetoric (or its key ploy, if you prefer) is the moment that he picks in the series of decisions that leads to out-of-wedlock children. Indeed, although I don't wish to make presumptions as to his actual familiarity with such people, it seems to me that Jerzyk, despite his "visit[s] to low-income areas," has a far too belittling view of their decision-making capabilities. Can't low-income women, to wit, consider the possibility of children when they elevate their relationships with men such that they become potential fathers of their children? In the progressive world, it seems, low-income women can't do otherwise than have sex first and ask questions later, the poor, dear, disadvantaged savages Others.

Here's how the world has appeared to work for the human beings (of all races and classes) whom I've known in every setting from an Ivy-League-in-all-but-name campus to the navy-blue-collar commercial fishing docks: Having frequent and direct contact with similarly situated people whose poor decisions have proven dramatically detrimental discourages like behavior. Observing that those people receive increased benefits — not to mention increased creds toward the coveted victim status — enables poor decisions, especially when the detriments are still hypothetical, and tangential to the action under scrutiny (as conception is, in the hyper-sexed modern mind, a tangential consequence to the perceived benefit of casual sex).

Generally speaking, women don't expect to become pregnant from one-night stands or otherwise promiscuous behavior. When the consequences of that outcome are more dire, however, the pre-fling calculation is more likely to be made in terms of risk than of hypothetical possibility.

It is without a doubt a difficult balance to strike — that between raising up children who've had the misfortune to be born into such circumstances and easing the burden of adults' loose behavior. I'm still haunted, however, by this article out of England a few years ago:

In Britain, surveys indicate that for many teenagers becoming pregnant is an aspiration: the benefits and cheap local authority housing available is seen by some as a reason to become pregnant - especially for teenagers from impoverished or broken homes. A recent poll by the Family Education Trust indicated that 45 per cent of single pregnant teenagers had either wanted to conceive or "didn't mind" that they had. The introduction of £5,000 worth of free nursery care to enable pregnant teenagers to return to school is seen by many as a "perverse incentive" to attract young girls into parenthood.

As Robert Whelan, the director of the Family Education Trust, points out: "The scale of state help directed at young single parents is such that girls who do not have babies are losing out."

Jerzyk's fallacious reasoning with respect to the way the world actually works twists that very concern on its head with his notion of familial advantages:

Ask teenagers in Barrington what two parents got them. Two parents does not equal a nurturing family environment. Two parents can be working high-stress jobs as lawyers and doctors in Barrington and never be home for their kids. Or two parents can be working long-hours jobs as janitors and CNAs in Pawtucket and never be home for their kids.

Or two parents can construct a not-uncommon household (such as mine) in which one parent earns the predominant income, and the other stays home with the kids or takes on a decreased workload. It would seem that progressive families are all overworked and miserable, with two parents being hardly preferable to one. But a child with only one parent around, whether he or she is working as a janitor or a lawyer, has next to no chance of such a living arrangement. (And that's letting Jerzyk slide on his assumptions that Barrington households are not nurturing and that they're all two-parent.)

Between the progressive ideology of and the excessive "safety net" preferred by those who are driving this state into the ground, it becomes a moralist's question to ask whether young women ought to be having sex with men whom their children would be better off without. It becomes a sign of an oppressor to expect too much of the poor things.

Negotiating Our Own Demise

A comment from the "stunned" Senate Majority Leader Teresa Paiva Weed in yesterday's Projo article raises a couple of beguiling questions:

As a tradeoff for the new work requirements and time limits the state adopted in 1996, she said, Rhode Island made subsidized health care and childcare available so, she told the luncheon audience, talk today about "cutting welfare" to save any significant money would have to mean significant cuts in health and childcare.

First of all, with whom was the state "trading off" for work requirements? Is this another instance of Rhode Island's negotiating with the recipients of its largesse?

Second, if the health- and child-care benefits were a substitute for cash, anyway, why should the state treat them any differently as far as cuts are concerned? Of course, we'd probably be right to suspect that the "trade off" was actually a transfer to a give-away made more secure by the infamous "what can we do" factor. "What can we do? Let the children suffer?"

It's one thing to take away the money for somebody's cable bill. It's another to take away the extra food money that we gave him so that he could afford to pay his cable bill himself.

But Do We Want to be Protected?

New York City has tweaked and reissued proposed regulations requiring chain restaurants to put calorie information next to prices on their menus and menu boards.

Many chains, including McDonald’s, Burger King and Starbucks, already provide calorie information on their Web sites or on posters or tray liners.

But health officials say customers rarely see this information before deciding what to order. The regulation would require the calorie counts to be posted as prominently as the price of each menu item. For many fast food outlets, that means the information would be added to the big signs behind the cash registers that list food items and prices.

The regulations will be subject to public comment on November 27 and then a vote by the Board of Health, which is expected to approve them. Naturally, intrinsic to these regulations is the assumption that if caloric information is readily available to customers, they will make different - more healthy - choices from the menu.

“The big picture is that New Yorkers don’t have access to calorie information,” said Dr. Thomas R. Frieden, the city’s health commissioner. “They overwhelmingly want it. Not everyone will use it, but many people will, and when they use it, it changes what they order, and that should reduce obesity and, with it, diabetes.”

Subway restaurant has proven to be a bit of a testing ground for at least the first part of this theory.

A health department survey this spring found that only 3 percent of customers at Domino’s, Papa John’s, Taco Bell and other popular restaurants saw the calorie information provided by those chains on their Web sites or other locations before ordering.

By contrast, about 31 percent of Subway customers reported seeing the calorie information, which was posted prominently next to the cash register at the time of the survey. Those who said they did consumed about 634 calories, about 50 calories less than those who did not, the study found.

So it appears that about an eight percent reduction in calorie consumption can be credited to more prominent signage.

This new regulation will follow upon New York's widely publicized ban last year of trans fats in all city restaurants. Both regulations were applauded by the Center for Science in the Public Interest last year.

Congratulations to the New York City Board of Health, Health Commissioner Tom Frieden and Mayor Michael Bloomberg for adopting these bold new measures to promote the public’s health. When New York City's major chain restaurants comply with these sensible new regulations, I hope they make the changes nationwide. ...

The calorie-labeling regulation approved by the board today will be of enormous help to weight-conscious New Yorkers. ... Most of the industry's arguments against calorie labeling are simply red herrings. ... Calorie labeling will put consumers back in the driver's seat and let them exercise personal responsibility for themselves and their children.

CSPI will be encouraging other cities and states, as well as Congress, to ensure that the rest of the country receives the same kind of protection from trans fat and information about calories as New Yorkers will soon have.

Some questions arise.

Aren't the menu boards of New York City chain restaurants going to be awfully cluttered with this new regulation?

Will the 8% calorie reduction experienced by Subway customers carry over to all chain restaurants? If it does, will there be a corresponding reduction in obesity and diabetes?

Do we dare to ask: is it worth it? Worth the bigger government? The expense to modify menu boards? The inconvenience of the extra time to sort through an information-packed menu board?

And finally, at what point does regulation cross the line from protection to intrusion?

Too Appropriate to Make Up

Periodically, one comes across coincidences that are so appropriately rife with subtext that only a heavy-handed author would layer them in a fictional story. Putting aside the RI-welfare-state practice in question, there's an example of reality's too-obvious plot line in Elizabeth Gudrais's Projo piece, "R.I. is ripe for welfare abuse, critics say":

Last spring during General Assembly hearings on bills aimed at thwarting illegal immigration, some lawmakers asked whether the state was doing enough to limit social-service programs to people who are legally eligible for them.

The lawmakers’ questions focused on the practice of entering a standard code number — 666 — into the state computer system when someone seeking benefits such as welfare or childcare assistance can’t provide a valid Social Security number, generally available only to U.S. citizens and those with legal immigration status. ...

Compared with other states, Rhode Island’s numbers are easy to track because all programs use the same code number. Back in the late 1980s, the developers of the computer system used by the social-services programs chose 666 because they needed a number that was not in use by the federal government as a prefix for Social Security numbers. Edward P. Sneesby, who was a policy officer with DHS at the time and is now the department’s associate director for program operations, says there were “only a handful of options” and that other states used the same number.

Taking our Social Security numbers as a form of identification, from the government's perspective, how appropriate that those drawn under the government's wing with no SSN identity of their own would be branded with 666! Woonsocket's Rep. Jon Brien (a Democrat, incidentally)...

... finds it hard to believe that the law is being enforced without exception. "There exist actual guidebooks that are given to illegal aliens, once they get here, by social organizations in this state, telling them how to go about getting State of Rhode Island benefits," he says.

"We're talking about people who have just arrived here illegally, children in tow."

What are the odds, I wonder, that the person to call for copies of the guidebooks would be Lucy Devlin (or some such), at extension 13? Perhaps when she hands one to you, she'll say, "All these benefits the state of Rhode Island will give to you."

A Movable Sob Story

My heartless campaign to explain to Rhode Island that there are alternative, more comprehensively beneficial ways of helping families than maintaining our state's structural deficit and driving out businesses and our most promising citizens continues in today's Providence Journal.

Problems Overcome

My Projo piece from last Friday is now up. I mention it for those who haven't read it, for those who wish to read it in Projo html, for those who'd like to help me create the illusion that I can drive readership, for those who have the time and inclination to play "find the edits," and for those who disbelieved me.

Assurances of Unscrupulousness

PROEM:

First published in the August 17 edition of the Providence Journal.

It's a suspicious thing for a legislature's press release to use the word "unscrupulous."

"Unscrupulous" is a word for activists and marketers. When a representative body uses it to describe some of its constituents --- in this case, building contractors --- one suspects that it bubbled up as a talking point from the dark places of the statehouse, where laws are sold and bought. It's an adjective that novelists use to label minor businessman-type characters as "very bad."

This is not to say that there are no unscrupulous contractors in Rhode Island, but the specificity with which the General Assembly has targeted those in the construction industry and its notions about what actions will remedy the supposed problem give the impression that somebody behind the scenes stands to gain from the measures taken. It is telling that the 2007 anti-unscrupulosity bill (H6511Aaa) creates, as one of its provisions, seats for two builders' associations on the Contractors' Registration and Licensing Board. And it is not surprising that the law's matron in the House of Representatives, Charlene Lima, is the very same woman who tagged an after-your-bedtime amendment onto the state's budget seeking to thwart privatization of government jobs.

Call her the Champion of the Established Player.

Suppose that a carpenter discerns several ways in which to meet clients' needs more efficiently and inexpensively --- and with more scruples--- than contractors for whom he's worked. After years of the legislature's "protecting consumers," if he intends to undertake projects costing above the piddling amount of $1,000 (labor and materials), that well-meaning carpenter will have to register as a contractor (for $200), take up the lawyerly art of contract writing (including research of the various items that must be included in the language of each contract), acquire insurance for half a million dollars, and figure out what, exactly, will fulfill the requirement for "continuing education" (followed by paying for and participating in applicable courses). All of this before so much as handing out business cards, under threat of a devastating $5,000 fine ($10,000 for subsequent offenses, although one would hope that the first batch of cards counts only as one).

It would be exaggerating to call any of these requirements barriers, but even hurdles create disincentive, particularly in an industry populated by workers who picture concrete, not cursive, when they hear of "forms." An obstacle course of regulatory hoops would seem less apt to trip up schemers who require just the sort of advantage that paper shields can provide in the marketplace than craftsmen who merely wish to ply their trade.

This dynamic applies more broadly than just to the trades, of course. For all the astonishment at the disproportionate remuneration of CEOs, the lack of consequences for such mammoth waste is too often treated as inexplicable. That a national CEO for UnitedHealthcare, for example, could in one year earn 150% of the combined salaries of the 2,000 employees of RI's St. Joseph Health Services (including two hospitals and an assisted-living facility) suggests that something more than mutual insider backwashing is thwarting competition.

Healthcare is a heavily regulated industry, to be sure, but regulations and restrictions provide a safety cushion for incumbents generally. Registration/licensure, continuing education, industry-specific, and even minimum wage requirements all dam the flow of competition, while doing little more than adding administrative costs for corporations, category killers, and Big Box stores. Established players can pass on those costs to customers with an ease of inverse proportion to the difficulty that upstarts and up-and-comers have addressing the same necessities. Moreover, in a world of rapid transportation and instantaneous communication, the capability of moving facilities overseas makes larger companies the ones that benefit from the possibility of excising regulatory baggage.

Notwithstanding the good intentions of those who would wield the law to protect the little guy, nothing is so much to his advantage as freedom. That includes the freedom to make bad choices, as well as the freedom to profit from others'. Immoral and unfair business practices can be prosecuted; complaints can be filed and posted for the public. More importantly, businesses can leverage the poor behavior of their competition. If the goal is to stop wrongdoers, their deeds can be judged when done. Instead, the General Assembly has sought to "give consumers some assurance" in advance and encourage potential contractors to hedge, rather than strive, lest they stumble on "a rule or regulation promulgated by the board."

Just as one cannot deny that some contractors are crooks, one must acknowledged that not all of those who would wield the law have good intentions. Who will protect Rhode Islanders from unscrupulous legislators, and what assurance is available that those we elect are aware of their own responsibilities to us?

Assistance to the Established Player

Although programming problems (as I've been given to understand) have kept it in print-only limbo, I've got an op-ed in today's Providence Journal about the ways in which, under the headline of protecting the "consumer" from "unscrupulous" free agents (including construction contractors), government generally (and the General Assembly in particular) creates a regulatory regime that ends up protecting established players from the anti-corruptive of competition.

I'm particularly satisfied that the piece gave the Projo reason to add the fact that I'm a "non-union carpenter" to my biographical line.

So go on out and put down the fifty cents for a Friday edition of the Providence Journal, and if you're so inclined, it couldn't hurt to send the suits a note explaining that you did so out of interest in the opinions and writing of the Anchor Rising gang.

Putting Out the Litigatory Fire

These two items aren't directly related, but reading them in close proximity to each other, I discerned some dots that could be connected. First is RI Senate Majority Leader Teresa Paiva Weed's defense of the General Assembly's failure to reform our state's fire code:

Following enactment of the new code in 2003, the Senate has responded when necessary with legislation to address concerns that were expressed to us about the code by the business community. Clarifying the code’s flexibility in 2005 is one example. Additionally, Sen. V. Susan Sosnowski championed the effort to create more flexible options for fire safety in churches and houses of worship. Using the flexibility of the existing code, I worked to ensure that consideration was given for bed-and-breakfast establishments. The Senate provided substantial staff support to the Council of Churches and the Bed and Breakfast Association in these successful efforts to find workable and practical interpretations of the code.

I'm not sure what "concerns" the "business community" has "expressed" to the legislature, but I've heard tales from electricians on various jobsites, and seen evidence, of ridiculous requirements that cost much more money than they appear to be worth. I've also discovered that the school next to my house is being rebuilt in part so that the younger children can actually enter the cafeteria, which the current code forbids.

On to the next, which is a bit of autobiography from Eric of Classical Values (who is not speaking of Rhode Island, specifically):

After spending years running a very popular but commercially unsuccessful nightclub, I was advised (by some attorneys who meant well) that the ideal career change for me would be to sue business owners for non-compliance with the ADA.

"Attorneys fees are there by statute!" I was told.

Great. Now that I was out of business, I could be born again as a despicable parasite and help ensure that other business owners would be put out of business. It struck me that if I became a homeless derelict, I'd be doing more for the world than if I helped ruin other people's businesses. (It didn't help much that one of the many reasons my business failed was that the building was cited by the fire marshall for inadequate handicapped access, and there was no way to remedy this without major alterations to the building, which I did not own, for patrons in wheelchairs who never came.)

Senator Paiva Weed makes much of the fire code's flexibility, but there's flexibility, and then there's flexibility. I'd suggest that the flexibility of business owners and taxpayers to switch jobs and rebuild buildings should not count.

A Word from a Neighbor

I can't imagine what I would do — or, more to the point, demand — if my little square of land turned out to be contaminated. My family would probably be moving into somebody's basement while we tried to figure out how to either save the property or extricate ourselves from ownership of it. Folks right down the hill from me have been facing just this situation for several years, now, so it's not merely hypothetical, but as the legal bills flow out of the attempt to force a company to pay for the clean up, the efficacy, as well as the principle, of doing so is becoming a serious question:

The battle over a contaminated Tiverton neighborhood and the cost of cleaning it up moved to the Rhode Island State House last night, where it was revealed that the tab for a Washington, D.C., law firm representing the state has risen to $777,000 — and climbing. ...

The Rhode Island Department of Environmental has traced the contamination to the former Fall River Gas Co., which allegedly dumped waste material in the area in the early 1900s. The company later became part of New England Gas, which was in turn purchased by Southern Union, a big utility company based in Houston, Texas. ...

Sutherland Asbill, which billed $355,000 in January and February, as previously reported, billed the state another $322,000 for March and April. Noting that the state has yet to receive the firm’s bills for May and June, Alves noted that the bills have been piling up at the rate of $200,000 a month and have likely already reached the $1 million range — with no clear end in sight.

Each month's bill is, by itself, over three times the $60,000 that the DEM was authorized to spend. Clearly, somebody in the line of command is under the impression that victory is certain, but American governmental types' recent transformation into big-wallet-seeking plaintiffs may be crossing into poorly considered territory.

Scarcely a Rhode Islander, no doubt, is not sympathetic to the plight of the affected families, and calls for some sort of well-defined fund to help them would likely draw impressive response; I'd probably contribute to a rattled cup, and if the state weren't on the verge of financial collapse, some of its resources would more readily be