Monthly Archives: October 2009

Derrion Albert Remembered

Last month, America mourned the murder of a promising young black man in Chicago.  This reminded Jeremiah of a similar incident in Newark, and community policing efforts there.  This week, the Economist features a brilliant survey of community policing – required reading for leaders in these troubled cities.

Lest we think only honor students are in danger, the Chicago police are asking for help with crimes against the following young people:  Martell Barrett, DeQuarrius Cannon, Gamaliel Toscano, Percy Lavelle Day, Derrion Albert, Corey McClaurin, Luis Hernandez, Derrick Harris, Ebraham Tabani, Shawn Wilson, Ramone Morris, Damier Love, Juan Cazares, Gregory Robinson, Raheem Washington, John Edwards, Kendrick Pitts, Racheal Beauchamp, Johnel Ford, Mya Lyons, Brian Murdock, Quentin Buckner, Esteban Martinez, Jose Guiza, and Dushawn Johnson.

We need your help! Get involved! Go to your Beat Meeting and form a Block Club!

It doesn’t get any clearer than that.  If you live in Chicago, click here to join CAPS.

See also: Mark Kleiman’s book

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Rob from the Rich

robin_hood_classicJeremiah is fond of saying that “free” government services, like health care, aren’t really free because we pay for them with our taxes.  This turns out to be incorrect.  Most of us will enjoy free health care because the rich are going to pay for it.

According to the IRS, more than half the total income tax is paid by Americans earning more than $200,000.  Four million rich households pay the freight for the rest of us.  Most Americans, earning between $20K and $100K, contribute less than 10% of their income.

Funding social programs by soaking the rich seems like a good idea until you realize that this same money, left in the hands of Americans – especially rich Americans – is what drives investment, spending, and jobs.

Socialist tax policy crops up in England every so often, and then ends in disaster.  As Melanie Phillips of the Daily Mail puts it:

By singling out the wealthy as scapegoats for the failure of government policy, it implicitly classifies as the enemies of society people whose efforts are essential to its prosperity.

Ms. Phillips goes on to say that confiscatory taxes act as a brake on wealth-creating activities throughout the economy, leading to stagnation and, ultimately, less tax revenue.

House Speaker Pelosi proposes to pay for her “public option” with a 50% surtax on the rich.  This is the same figure, and the same attitude, which has now made England’s Labour party unelectable.

See also: Culture War over Capitalism

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Veto Partisan Health Bill

There is no good reason to pass costly healthcare legislation this year, with the economy in recession and the federal budget in a record deficit.  The only reason is a craven, partisan one.  House Democrats, led by Speaker Pelosi, have the votes to push the bill through despite conservative objections.

Ms. Pelosi, furthermore, refuses to let go the “public option.”  She and her followers are committed to this idea because they fundamentally mistrust the free enterprise system.  Senator Joe Lieberman – an independent – said it best:

I don’t remember another case where our answer to a concern about fairness in the marketplace — in this case whether there is real competition in the health insurance business, whether the health insurance companies are being fair in their rates, et cetera, et cetera, all important, reasonable questions — I don’t remember another case where the answer to that was to create a government-owned corporation to compete with the private sector.

Right now, the only brake on the House – and their statist approach – is the Senate.  Many Senators, including Democrats, do not support “public option.”  But the House thinks President Obama is desperate, and will sign anything.  He needs to show America that they are wrong.  A responsible leader does not sign landmark legislation without bi-partisan support.  President Obama should send Ms. Pelosi back to the drawing board.

See also: Jeremiah’s four laws of public spending.

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Fox News Biased?

Anita DunnAmerica was shocked this weekend – shocked – to learn that Fox News has a right-wing bias.  Thanks to White House Communications Director Anita Dunn, for this news flash.

Jeremiah recalls a time when you could tell someone’s politics by their choice of newspaper.  This has been true since the French Revolution tried to suppress Le Constitutionnel.  What is alarming is not that media outlets are biased, but that Americans – if Ms. Dunn is to be believed – aren’t aware of it.

For those who stopped watching TV after Cronkite (a lefty), here is a quick guide to media bias:  The Wall Street Journal is pro-business and, thus, on the right.  Fox News, the New York Post, and the Washington Post are also on the right.  The New York Times, MSNBC, the Associated Press and NPR are on the left.  If you didn’t know already, you could tell from the smirking today on MSNBC.

Informed Americans must read from both sides, plus foreign sources, to get the facts.  Director Dunn, who had previously bragged about her “absolute control” over the media, is evidently using George Orwell’s description of her job.

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Public Option Still a Bad Idea

Senator Max Baucus deserves credit for putting together a half-decent bill on health care reformSenator Snowe, too, for having the “public option” removed.  A Democrat and a Republican, respectively, they showed good bi-partisan cooperation.  Unfortunately, there is no such spirit in the House, where Nancy Pelosi has vowed to bring back the provision.  Even President Obama, an early supporter of “public option,” has signaled he will sign a bill without it.

Ms. Pelosi, and others in the House, describes the provision as stick with which to beat the health insurers.  These are people who don’t believe in the free enterprise system.  Certainly, insurers need to feel the pinch –but all that’s required is to remove distortions from the health insurance market.  Create a binding individual mandate, end the deductibility of employer-paid plans, and allow interstate competition.  Once the free market goes to work, we’ll see insurers beating each other – without government help – like GEICO and Progressive.

House Socialists also like public option as a vehicle for income redistribution.  The “rich” would pay a hefty surcharge, to subsidize care for the poor.  The Baucus plan is upfront about redistribution, and accounts for it, instead of burying it in a vast new bureaucracy.  Not everyone is a fan of redistribution, but at least our leaders could be honest about it.

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Green Tariffs

The prospect of “green tariffs” answers a longstanding complaint about global free trade and, at the same time, promises to level the playing field for American workers.  According to The Economist,

France and certain American senators want to talk up “green tariffs” in case China and India duck binding limits on carbon.

Environmentalists fear that globalization will incite a “race to the bottom,” in which exporting nations gain advantage by trashing the environment.  Similarly, workers worry about competition from nations with poor standards for labor protection.  Green tariffs should be employed on both accounts.

The WTO should set global standards for environmental and labor protection, and then assign exporting nations to classes based on their level of compliance.  When trading outside of their compliance class, a nation could expect to face higher tariffs.  This would give everyone an incentive to clean up their act, and it would give the WTO a means to address serious complaints about free trade.

See also: Can Green Trade Tariffs Combat Climate Change?

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Filed under Trade

Too Big To Fail?

By now everyone knows the compensation plan that caused the financial crisis.  It’s called “heads I win, tails you lose.”  Investment bankers make big bets, using whatever instruments escape SEC scrutiny.  If they win, they’re masters of the universe.  If they lose, Henry Paulsen covers their bets – and their bonuses – using taxpayer money.

If an airline or a car company takes on too much debt, makes risky investments, and overpays its executives – it goes under!  The well-run companies take over.  So, why squander $700 billion on failed banks?  Because failing financial institutions can damage the whole system.  The bankers, in effect, hold the real economy hostage.

The Bush administration initially papered over the crisis with some success, rescuing Merrill-Lynch and Bear Stearns.  When they randomly allowed the next one, Lehman Brothers, to fail, markets tumbled.

Treasury Dept

The Bush administration was characterized by lax financial regulation, for which Obama’s statist approach overcompensates.   Heavy reserve requirements and new regulatory bodies are not required.  The Fed does not need new responsibilities – or to become politicized.  Pay caps are a populist gimmick.

The answer is not to prevent banks failing, but to prevent failing banks from damaging the system.  Regulators must be on the lookout for systemic risks – using antitrust laws to break up big banks, and restricting dangerous instruments.  AIG failed because it had a “monopoly” on bad debt.

Secretary Geithner should explicitly remove all government funding, support, and guarantees from the private banking sector.  He should sell off Fannie and Freddie, bring back Glass-Steagall, and generally let the banks know they’re gambling with their own money.

Aerialists working without a net have a surprisingly enhanced ability to stay aloft.

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