Monday, November 10, 2008

Against Bailouts

I was always against the mortgage bailout as a theoretical matter, but about the time it passed I decided I was against it as a practical matter as well. My biggest problem with it was that it passed almost unlimited power to the Treasury to meddle with the markets. This lack of transparency means that nobody wants to sell their damaged assets at market price because if they hold out they might convince the government to pay more for them.

One argument I didn't make, but maybe should have, was that it's a slippery slope from one bailout to another. I certainly foresaw at the time a disastrous bailout of individual mortgage holders who bought houses they couldn't afford on terms that any reasonable person could have seen would get them into trouble. I've outlined the problem with this sort of thing before, but to summarize it comes down to the fact that some people bought things they can't afford and now everybody else has to pay for it. This means that if Alice, Bob, and Charlie all make $60k and have similar lifestyles that if Alice bought a $250k house, Bob bought a $150k, and Charlie decided to hold on and wait for the market to drop, now all of them have to pay $200 a year in takes to fund Alice's house and to make matters worse the market stays high so Charlie doesn't get the deal he was holding out for (because he's now paying Alice to stay in the house he was hoping to get when the price dropped).

But I certainly didn't foresee that this would end up in bailouts for Unions, Auto makers, and state governments. I've only seen a couple mentions of state governments, but that's the real focus of this post because I can't imagine something more anathema to the original layout of our government than the bailout of a failing state. It might seem like I'm engaging in a great deal of hyperbole here, but I'm really not. Most people would probably point to Free Speech or Free Religion as the bedrock of the US Constitution, but the fact of the matter is that though it might be the first of the amendments, it's an amendment, not part of the original document. The thread that primarily holds the Constitutional together is the idea that a Federal government only has certain delegated powers and for the most part the States can operate independently. There are several reasons this is a good idea, but two of the primary ones are that it keeps administration of day to day activities closer to the people actually affected and that it creates an incentive to move toward better ways of organizing your government. If the New York law regarding health care is doing a fantastic job and people are going to New York doctors to get services, pretty soon New Jersey (and the rest of the country) will realize what a great thing they have and adopt it.

By bailing out bankrupt state governments we're doing the exact opposite. If North Dakota decides they don't like pollution so they're going to outlaw cars and build monorails for everything and this causes a huge dip in tax revenues as businesses move away and a huge increase in spending, don't worry. The taxpayers from the other 49 states will come to the rescue and subsidize the monorail so that the one state with the bad idea can keep behaving how they want.

Besides this being appalling on its face, it's also interesting with how it fits with a particular pronouncement from President Elect Obama. He was quoted once on the stump with saying that "We can't drive our SUVs, eat as much as we want, and keep our houses at 72 degrees at all times and then just expect that other countries are going to say OK." To be frank, as long as we're paying to keep the Oceans safe from piracy, funding 22% of the UN (at a rate of $1.42 per citizen), and not taking a dime from other countries, I don't care if they think it's OK. Though I don't know his stand on it, I would guess that since he normally takes the standard progressive line that he thinks bailing out California or New York for spending well beyond their actual income is fine. It's a rather odd position to think that people in Nebraska should be okay with paying for unaccountable government spending on Californians, but we need to worry about what France thinks of us spending money we earned how we want.

Wednesday, November 5, 2008


I've seen several comments to the effect that McCain did the best a Republican could have done in this election cycle. I couldn't disagree more. I wholeheartedly agree that McCain did a fantastic job campaigning. Much better than I expected. He probably couldn't have done any better, but that's not the same as saying that somebody else couldn't have.

They day before Super Tuesday I vehemently opposed McCain primarily because I stated that he couldn't win the Presidency. He was great on Iraq, but horrible on everything else. And he was, in fact, so great on Iraq that after his policies were implemented in midyear Iraq became such a non-issue he had nothing to run on. My question on Super Monday was "Do we really want to stake the campaign on early support for the surge against optimism, youth, media support, and the promise of amorphous change?". It ends up I think the Republican primary voter answer was "yes, we do" (though from what I've read several of those voters ended up changing it to "yes, we can" by the time the general was finished).

I'm going to differ from conventional wisdom in that I think Palin was a great addition to the campaign. She was as much a Washington Outsider as you could get in a year when something new was extremely important. Her political inexperience and the fact that she had more executive experience than everyone else running combined should have highlighted Obama's inexperience. She drew huge crowds everywhere she went, frequently bigger than either candidate at the top of the ticket. If anything, the main problem with Palin was that she was being handled by McCain. The wardrobe fiasco, for instance, would never have happened if she had worn her normal red suits.

Obviously Obama benefited from the fact that he broke his promise to use public funds, that the major media were essentially operating as campaign adjuncts, and that he got huge numbers of donation (including huge amounts of credit card fraud and illegal donations which he intentionally didn't check into), but that doesn't let McCain off the hook.

Everybody knew going in that Obama would have the support of the media. They were practically running his primary campaign with their continual assertions that the rather close Democrat race was over and their former darling Hillary should concede. Either Romney or Giuliani would have handled that better, since they've both had to go against the media before. Most of the time when McCain comes out on a controversial issue, it's with the media and against the Republican base. He's really never had to pick a fight with the media before.

Additionally Obama raised a huge amount of money by breaking his promise to use public money. McCain would never have broken his promise, but Romney wouldn't have had to. I'll go ahead and admit that in 2000 I liked McCain's campaign finance reform idea. I've since come to my senses and realized it's both an Unconstitutional intrusion on the ability of private citizens to let their voice be heard about the election and an ineffectual way to limit campaigns, serving mainly to help incumbents and those supported by the media. As far as I know, neither Romney nor Giuliani ever supported it, so they could have entered fund raising on the same ground as Obama (and then Obama wouldn't have had to lie to the American people, since he said he would take public funds only if his opponent did).

Most importantly of all, as I pointed out nine months ago, McCain only had one solid position: Iraq. McCain is for the Constitution, but okay with suppressing political speech through campaign finance laws. He is all for limiting the wasteful purchase of $3000 projectors for some random local project, but also for spending $700 billion on an ill defined plan to buy up bad debt from corporations. He is for national security, but against a border fence. He's for strict constructionist judges, but not as strict constructionist as Alito. Like Obama, McCain is to a large extent a populist (as, unfortunately, Sarah Palin appears to be as well). He decides things not from a consistent world but from what seems to him right at the time.

There was a lot I didn't like about Romney and especially Giuliani, but they had a coherent platform and would have been comfortable fighting on any issue. I didn't hear Romney's speech at the convention, but I've heard him before and he could have annihilated Obama in the debates on healthcare, taxes, spending, and executive experience. Both Thompson and Giuliani gave far better convention speeches than any of the stump speeches (including the convention) I heard of McCain's the entire cycle. Additionally a Mayor or Governor paired with Sarah Palin would have been in a perfect position to truly eviscerate a couple of establishment Senators with no executive experience whatsoever.

This is not to say I think they could have won. Barack held all the cards in this election cycle and his Presidency was all but inevitable. I do, however, think that someone else could have done better.

Obama is my President

I read a couple of comments on political blogs last night saying that Obama stole the election and "he's not my President." I've heard enough of that garbage the last 8 years; conservatives need to get over it.

I don't like Obama. To be frank I think he is going to do more damage to this country than any President since FDR. I think in the campaign he has shown himself to be extremely hostile in suppressing opposition speech, willing to intentionally turn off fraud checking on his credit card donations to abet credit card and campaign fraud in furtherance of his election, and willing to lie about his positions (I'm not sure what else to call it when he is simultaneously espousing conflicting positions, unless he's just postmodern enough to reject truth itself). But I think Americans knew what they were voting for, and they chose him.

Do I wish McCain had won? Sure, I also wish Fred Thompson or Romney had won, but that didn't happen. Do I wish voters were better informed. Absolutely. Do I wish we did a better job cutting down on voter fraud? Yes.

Was Obama elected President of the United States? Yes.

I can reject the whole idea of elected leadership, but I cannot reasonably accept America and reject Obama.