Posts Tagged ‘Politicians’

Here’s an interesting issue to ponder. Is corruption rampant in government because the perverse incentive structure of politics turns good people into bad people?

Or do bad people naturally gravitate to government and politics because it’s the easiest (and legal, though generally immoral) way to take money from other people?

I guess this is like a chicken-and-egg question with no clear answer, though Mark Twain preferred the latter interpretation.

Though he was being too narrow. Yes, Congress if filled with people who are willing to use coercion to take money from ordinary people in order to line the pockets of their cronies, but this is also true for politicians and bureaucrats in the executive branch, as well as their counterparts at the state and local level.

Let’s look at a couple of oleaginous examples. We’ll start with a grotesque example of nepotism. Except this isn’t a routine example of daddy giving junior an undeserved job in the family company. In this case, we have Washington-style nepotism. Daddy has ransacked taxpayers to line the pockets of his daughter. The Daily Caller has the unseemly details.

More than $9 million of Department of State money has been funneled through the Peace Corps to a nonprofit foundation started and run by Secretary of State John Kerry’s daughter, documents obtained by The Daily Caller News Foundation show. The Department of State funded a Peace Corps program created by Dr. Vanessa Kerry and officials from both agencies, records show. The Peace Corps then awarded the money without competition to a nonprofit Kerry created for the program. Initially, the Peace Corps awarded Kerry’s group — now called Seed Global Health — with a three-year contract worth $2 million of State Department money on Sept. 10, 2012, documents show. Her father was then the chairman of the Senate Committee on Foreign Relations, which oversees both the Department of State and the Peace Corps. Seed secured a four-year extension in September 2015, again without competition. This time, the Peace Corps gave the nonprofit $6.4 million provided by the Department of State while John Kerry was secretary of state.

What makes this story especially outrageous is that John Kerry is a multi-multi-millionaire, having married in the Heinz family fortune.

Does he really need to pick the pockets of taxpayers to boost his daughter’s finances?

Here’s another example. The Governor of New York, Andrew Cuomo, set up an “economic development program” that predictably turned into a playground for the politically well connected (sort of a state version of the corrupt program in Washington that financed Solyndra and other money-losing schemes).

The New York Times outlines this scandal, though be prepared to shower after reading.

Federal corruption charges were announced on Thursday against two former close aides to Gov. Andrew M. Cuomo, a senior state official and six other people, in a devastating blow to the governor’s innermost circle and a repudiation of how his prized upstate economic development programs were managed. The charges against the former aides, Joseph Percoco and Todd R. Howe, and the state official, Alain Kaloyeros, were the culmination of a long-running federal investigation… The charges stemmed from “two overlapping criminal schemes involving bribery, corruption and fraud in the award of hundreds of millions of dollars in state contracts and other official state benefits,” federal prosecutors said in the complaint. Mr. Percoco, who had served as Mr. Cuomo’s executive deputy secretary, is accused of soliciting and taking more than $315,000 in bribes between 2012 and 2016 from two companies… Until January, when Mr. Percoco left the administration…, he was Mr. Cuomo’s all-purpose body man, political enforcer and shadow.

The good news is that at least some of the people in this disgusting display of cronyism may face legal consequences.

Oh, by the way, Cuomo used to be the head of the Department of Housing and Urban Development when regulations were implemented that required Fannie Mae and Freddie Mac to make more dodgy housing loans. This guy is a walking disaster area.

For the umpteenth time, the moral of the story is that the only way to reduce corruption in government is to reduce the overall amount of taxing, spending, and regulating.

Or you can magically wish that only angelic people will gravitate to the public sector. Maybe I’m a cynic, but I’ll go with the former option.

P.S. I wrote a few days ago about the IMF’s hypocrisy in attacking Trump for his views on trade taxes. The bureaucrats are right that we shouldn’t increase the tax burden on global commerce. My complaint was that sauce for the goose wasn’t sauce for the gander. Hillary’s plan to increase the tax burden on work and investment is an even bigger threat to growth, yet the IMF gives her a free pass.

Anyhow, one of the points I made is that trade taxes currently are quite low, so they presumably cause only a minor amount of damage, whereas tax rates on work and investment are relatively high, meaning that further increases would be especially debilitating to growth. I cited some research from a Spanish academic to show how trade policy has improved over time, but didn’t have specific details on trade taxation.

My buddy Bryan Riley from the Heritage Foundation has come to my rescue, sharing an article that includes this chart on historical tariff rates.

The bottom line is that trade taxes have declined by somewhere between 75 percent and 90 percent since the end of World War II. This has been a great victory for economic liberty.

Trump should be condemned for wanting to halt further progress and/or go in the wrong direction by boosting trade taxes.

But, to echo what I wrote the other day, Hillary also should be condemned for proposing a different set of tax hikes that would cause even more harm to economic liberty.

P.P.S. I wrote a column earlier this month entitled “Anatomy of a Brutal Tax Beating” to highlight how an expert at the Tax Foundation completely dismantled a silly and unlearned article by a writer for Vox.

Well, we now have an “Anatomy of a Brutal Education Beating.” Except it’s not right-on-left violence. It’s left-on-left violence. Jonathan Chait writes for New York magazine and he formerly had stints at The New Republic and The American Prospect, so he’s definitely not a libertarian type.

But he’s ethical and doesn’t have a high level of tolerance for other leftists who launch dishonest ideological attacks on charter schools. Here’s some of what he wrote while debunking an article by some guy named Charles Pierce.

Esquire’s Charles Pierce, a fervent charter critic, …does not dispute the findings that urban charters in Massachusetts provide dramatic education benefits. He simply doesn’t care. …In the sentence, Pierce goes on to assert that the cap on charters serves a vital purpose. But the Brookings study, which I doubt he’s read, shows the opposite. …The cap in Massachusetts is completely perverse, in fact. It allows more students to enroll in charters serving suburban students, where the charters do not outperform the neighborhood schools, and prevents more students from enrolling in urban charters, where the schools do exceed the traditional neighborhood schools. …Presented with evidence that certain schools are providing a clearly better education to low-income urban students, Pierce argues that education should be denied because … somebody is making money off of it. It is more important to him to stick it to the capitalists than to allow low-income, disproportionately nonwhite students to have a chance to have a better life. …What’s even more perverse about Pierce’s argument is that it is factually wrong. Charters in Massachusetts are not for-profit vehicles. State law prohibits for-profit operators from running a public charter school… The notion that charters are “companies” and an “industry” with “profits” — that is, the entire basis for Pierce’s opposition — is a figment of the imagination. …Pierce rails suspiciously against the donors to the anti-cap side. …It is strange to accuse people who are giving away their money to the cause of educating poor children of not “giv[ing] a rat’s ass about educating children in Roxbury or Mattapan”.

Wow. Chait drove over Pierce, then hit the brakes, put the car in reverse, and then drove over him again just for the fun of it.

A perfect example of the difference between a sincere person of the left and a hack who is probably just flacking for teacher unions.

P.P.P.S. I can’t resist returning to John Kerry. It’s not merely that he’s a staggeringly rich guy who nonetheless sees no problem with diverting money from taxpayers to his daughter. It’s also that he does everything possible to minimize the amount of tax that he pays. Everything possible.

P.P.P.P.S. This column focused on corrupt Democrats, but this is a bipartisan problem. Indeed, the worst offenders are probably Republicans.

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Since I’m not a fan of either Donald Trump or Hillary Clinton, I think that puts me in a good position to fairly assess whether the candidates are being dishonest.

And since several media outlets just produced their “fact-checks” on Donald Trump’s acceptance speech to the Republican convention, this is a perfect opportunity to see not only whether Trump was being dishonest but also whether media fact-checking is honest.

Here’s some of the “fact-checking” from NBC., with each indented example being followed by my two cents.

TRUMP CLAIM: Nearly four in 10 African-American children are living in poverty, while 58 percent of African-American youth are now not employed. Two million more Latinos are in poverty today than when the President took his oath of office less than eight years ago.

THE FACTS: Yes, 38 percent of African American children are living in poverty, according to Census data. But Trump isn’t correct that 58 percent of African American youth are unemployed. The Bureau of Labor Statistics finds that the African American unemployment rate for those ages 16-19 is 28.4 percent (versus 16.9 percent for all youth that age). And Trump is misleading on his claim about Latinos living in poverty. In 2009, 12.3 million Latinos were living in poverty (with a rate of 25.3 percent). In 2014, the number jumped to 13 million — but the rate actually DECLINED to 23.6 percent.

Shame on NBC for pulling a bait-and-switch. Trump didn’t say that there is a 58-percent unemployment rate among black youth. He said that 58 percent of them aren’t employed.

What NBC doesn’t understand (or deliberately chooses to hide) is that the unemployment rate only counts those “actively” looking for work.

Trump was focusing on labor-force participation.

I’m sure he made that choice because it gave him a number that sounded bad, but there are very good reasons to focus on the share of people employed rather than the unemployment rate (though it’s worth noting that a 28.4 percent unemployment rate for young blacks is plenty scandalous, which raises the question of why Trump didn’t point out that African-Americans have been hurt by Obamanomics).

On the other hand, Trump may be factually wrong about the number of Latinos living in poverty, though you’ll notice below that National Public Radio basically said Trump is right on this issue.

TRUMP CLAIM: President Obama has almost doubled our national debt to more than 19 trillion dollars, and growing.

THE FACTS: He’s right. When Obama took office on Jan. 20, 2009, the public debt stood at $10.6 trillion. It is now $19.4 trillion, according to the U.S. Treasury Department.

Since I’ve already explained that George W. Bush deserves the overwhelming share of the blame for the budget numbers in Fiscal Year 2009 (which started on October 1, 2008), I think NBC actually missed a chance to criticize Trump for either being dishonest or for overstating the case against Obama.

Now let’s see what the New York Times wrote about Trump’s accuracy.

• “Nearly four in 10 African-American children are living in poverty, while 58 percent of African-American youth are not employed.”

Fact Check: According to the Bureau of Labor Statistics, the unemployment rate of African Americans ages 16-19 in June was 31.2 percent (among whites of the same age, it was 14.1 percent).

The NYT does the same bait-and-switch as NBC, accusing Trump of saying A when he actually said B.

Is this because of dishonesty or sloppiness? Beats me, though I suspect the former.

• “Household incomes are down more than $4,000 since the year 2000.”

Fact Check: This is mostly true. Median household income in 2000 was $57,724; in 2014, which has the most recent available data, it was $53,657.

My only comment is that I’m surprised the NYT didn’t go after Trump for using 2000 as his starting year, which obviously includes the stagnant big-government Bush years as well as the stagnant big-government Obama years.

• “Our manufacturing trade deficit has reached an all-time high – nearly $800 billion in a single year.”

Fact Check: The goods deficit — more imported goods, less exported goods — was $763 billion last year. But that includes agricultural products and raw materials like coal. Moreover, the total trade deficit last year was only $500 billion because the U.S. runs a trade surplus in services.

I think Trump is wrong about trade. Wildly wrong.

But the NYT is once again doing a bait-and-switch. Trump was talking about the trade is goods, not the overall trade balance.

They could have accurately accused him of selective use of statistics, or even misleading use of statistics. But his claim was accurate (depending whether you think $763 billion is “nearly” $800 billion).

• “President Obama has doubled our national debt to more than $19 trillion, and growing.”

Fact Check: The national debt was $10.6 trillion on the day Obama took office. It was $19.2 trillion in April, so not quite double, but close.

As I explained above, this is an example of the media missing a chance to hit Trump, presumably because journalists don’t understand the budget process.

• “Forty-three million Americans are on food stamps.”

Fact Check: As of October, this figure was largely accurate, according to the United States Department of Agriculture.

At least the New York Times didn’t try to spin this number by claiming food stamps are “stimulus.”

Speaking of spin, here’s the fact-checking from National Public Radio.

Nearly 4 in 10 African-American children are living in poverty, while 58% of African-American youth are now not employed.

[Thirty-six percent of African-Americans under 18 were below the poverty line as of 2014, according to the Census Bureau. It’s not entirely clear what Trump means by “not employed,” which is not technically the same as “unemployed,” which counts people who aren’t working and are looking for work. However, the unemployment rate for black Americans ages 16 to 19 was 38.1 percent as of June. — Danielle Kurtzleben]

It’s actually very clear what Trump meant by “not employed.” As should be obvious, it means the share of the population that is not working.

But NPR presumably is pretending to  be stupid so they can do a bait-and-switch and focus on the unemployment rate.

2 million more Latinos are in poverty today than when President Obama took his oath of office less than eight years ago.

[That’s roughly true, by the latest data available. Around 11 million Hispanic-Americans were in poverty in 2008, compared with 13.1 million in 2014. The poverty rate makes more sense to compare, though — that has grown 0.4 points since 2008, but it has also declined lately, down by nearly 3 points since 2010. As for whether President Obama is responsible for this, we get to that below. — Danielle Kurtzleben]

The fact that NBC and NPR disagree appears to be based on whether one uses the total number of poor Latinos in 2008 or 2009.

Obama took his oath of office in early 2009, so it seems that NPR missed a chance to attack Trump.

Though without knowing how the Census Bureau measures the number of people in poverty in any given year (average for the entire year? the number as of January 1? July 1? December 31?), there’s no way to know whether Trump exaggerated or misspoke.

Another 14 million people have left the workforce entirely.

[There’s a lot going on in this statistic. So here goes: Trump may be talking about the number of adults not in the labor force — that is, neither working nor looking for work (so it includes retirees and students, for example). That figure has climbed by 14 million since January 2009 (importantly, this isn’t people leaving the labor force; it’s just people not in it, period). But while labor force participation is relatively low, the labor force has still been growing — Trump’s 14 million figure might imply that it’s not. And that low labor force participation isn’t entirely about a tough economy — a lot of it is simple demographics. In 2014, the Congressional Budget Office found that half of a recent 3-point drop in the rate had been due to baby boomers retiring. The other half was economic factors. — Danielle Kurtzleben]

That’s a long-winded way of saying that Trump’s number was accurate, but they want to imply his number is inaccurate.

Household incomes are down more than $4,000 since the year 2000. That’s sixteen years ago.

[That’s true, using median household income data, though he is not measuring from the start of the Obama administration as he is for the other stats here. If he measured from 2008, the drop was $1,656. Measuring from 2000 means measuring from the figure’s near-peak.

[A broader point about all of these economic statistics: A lot of them have been true, but the question is whether Obama is to blame. Higher poverty, for example, doesn’t appear to be Obama’s doing, as we wrote in a fact check last year. Moreover, many experts believe a president generally has only very limited ability to affect the economy. — Danielle Kurtzleben]

As suggested from my earlier analysis, I think it’s fair to point out that Trump was being somewhat arbitrary to use 2000 as his base year.

But it’s amusing to see NPR admit that the number is right but then engage in gymnastics in an effort to excuse the weak economic numbers during Obama’s tenure.

Excessive regulation is costing our country as much as $2 trillion a year, and we will end it very, very quickly.

[A few analyses have found that regulation costs around $2 trillion — one of the best-known, from the Competitive Enterprise Institute, estimated it at around $1.9 trillion this year. But as the Washington Post‘s Fact Checker has pointed out, in the past this figure has been characterized as a “back of the envelope” count, and that moreover, it doesn’t make sense to talk about costs without trying to count the benefits of regulation. — Danielle Kurtzleben]

This is another example of Trump making an accurate point, but NPR then blowing smoke in an attempt to imply he was being dodgy.

Last but not least, here are some assertions from Factcheck.org.

Trump claimed Clinton “plans a massive … tax increase,” but tax experts say 95 percent of taxpayers would see “little or no change” in their taxes under Clinton’s plan.

The fact that Clinton targets the top-5 percent doesn’t change the fact that she’s proposing a very large tax hike.

Trump claimed Clinton “illegally” stored emails on her private server while secretary of state, and deleted 33,000 to cover-up “her crime.” But the FBI cleared Clinton of criminal wrongdoing, and found no evidence of a cover-up.

This isn’t an economic issue, but I can’t resist making a correction.

The FBI Director explicitly pointed out that she repeatedly broke the law.

He simply chose not to recommend prosecution.

He said the “trade deficit in goods … is $800 billion last year alone.” It was nearly that, but it discounts the services the U.S. exports. The total trade deficit for goods and services is just over $500 billion.

As I noted above, Trump is wrong on trade, but the media shouldn’t do a bait-and-switch and criticize him for something he didn’t say.

By the way, the fact that media fact-checkers are largely wrong and dishonest is not a reason to be pro-Trump.

People can decide, if they want, to choose between the lesser of two evils.

My only message is that Trump is wrong on lots of issues, but that’s no excuse for hackery from self-styled fact-checkers.

P.S. Here’s my best Trump humor and here’s my best Hillary humor.

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Two months ago, I decided that the new President of the Philippines was the winner of the 2016 award for politician of the year.

It takes a remarkable amount of chutzpah, after all, to freely admit to having mistresses (yes, more than one). But the icing on the cake is that he then bragged that none of them are on the public payroll. I imagine Filipino taxpayers are very grateful that he self-finances his extracurricular activity.

This is all quite noteworthy, but I may have jumped the gun when giving President Duterte this award.

That’s because we now have another politician who has gone above and beyond the call of duty. This politician, you will see, has displayed a stunning degree of arrogance and elitism, acting as if the normal rules of decorum and prudence don’t apply.

No, I’m not talking about Hillary Clinton getting a free pass for endangering national security. Though that would be a good guess.

Instead, our new contestant for politician of the year is Monsieur Francois Hollande.

And the reason he has vaulted into contention is this amusing story (though presumably very aggravating story for French taxpayers) about the elitist and wasteful habits of France’s socialist leader.

French President François Hollande’s hairdresser earns a gross salary of €9,895 a month, according to a report in French weekly Le Canard Enchaîné, to be published Wednesday. …Over the course of the president’s mandate, which ends next year, the hairdresser will have received a gross salary of more than €590,000. The hairdresser regularly follows Hollande during his travels, according to Le Canard.

I realize I may be a bit old fashioned, and maybe my reactions are influenced by my minimalist approach to hair care (shower, comb with fingers, done), but why does a male politician need an on-staff hairdresser?!?

Especially when he doesn’t have that much hair to begin with!

By the way, it’s not 100 percent clear that taxpayer money is financing Hollande’s hairdresser, though I suspect that’s almost certainly the case. The article mentions that the hairdresser signed the contract with Hollande’s top staffer, which certainly makes it sound as if the French President isn’t spending his own money.

Though maybe the Socialist Party or some other entity is paying the bills, so I will leave open the possibility that Hollande is merely guilty of being a vain clown instead of being a vain clown who wastes taxpayer money.

What makes this story particularly interesting is that Hollande a few years ago publicly cut back on some of the lavish perks he and his cabinet were enjoying. But I guess that was all for show.

Though I’d actually consider it a bargain if politicians spent all their time preening in front of the mirror.

That would leave them less time to tax our earnings.

Or regulate our behavior.

And discourage our productivity.

Or corrupt our nation.

And they’d have less time to reward their donors at our expense!

Or to reward themselves.

Or to be disingenuous hypocrites.

But no need to belabor the point. Maybe now it’s easy to understand why I prefer “do-nothing” politicians.

Heck, I’d be willing to double their pay if they promised to stay home.

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I have a collection of columns about “honest leftists” and they mostly fall into two categories.

One group is comprised of people who are willing to admit that the statist policies they generally prefer have bad effects (such as gun control encouraging crime or welfare leading to more dependency).

The other group is much more dogmatic. They get credit for honesty only because they are publicly willing to admit views that most leftists try to keep hidden (such as thinking that all our income belongs to government or celebrating the role of coercion).

I also have a separate collection of statists who are honest enough to admit that their real goal is higher taxes on the middle class (mostly by imposing a value-added tax).

Now I’ve come across something that initially seemed a good fit for one of these collections since it deals with honesty.

But it doesn’t belong in any of the categories described above. So it’s time to create a new award for “Politician of the Year,” an honor that periodically will be bestowed on the elected official who goes above and beyond the call of duty.

Based on this blurb from a Wall Street Journal editorial, I think you’ll agree that the newly elected President of the Philippines deserves to win this award for a very unusual display of honesty.

Mr. Duterte gets credit for…claiming that he never gives public funds to his mistresses.

Wow, he’s openly admitting that he has mistresses (more than one, obviously), which is uncharacteristically honest for a politician.

And he’s not even using taxpayer money to subsidize his extracurricular activities with those “friends.” Assuming that’s true, kudos to President-Elect Duterte. Maybe he can give some lessons to the crowd in Washington.

By the way, we may also have a good idea of the politician who deserves the 2017 Award.

Though we don’t actually know his name because he’s written an anonymous book on what really happens behind closed doors in Washington. The U.K.-based Daily Mail has a report on this soon-to-be-released tell-all book.

A new book threatens to blow the lid off of Congress as a federal legislator’s tell-all book lays out the worst parts of serving in the House of Representatives – saying that his main job is to raise money for re-election and that leaves little time for reading the bills he votes on. …Washington is abuzz with speculation about who may be behind it. The book…discloses that the congressman is a Democrat – but not much else. …Much of what’s in the book will come as little surprise to Americans who are cynical about the political process. ‘Fundraising is so time-consuming I seldom read any bills I vote on,’ the anonymous legislator admits. ‘I don’t even know how they’ll be implemented or what they’ll cost.’ …And on controversial bills, he says, ‘I sometimes vote “yes” on a motion and “no” on an amendment so I can claim I’m on either side of an issue.’

The book will reveal how politicians indirectly line their own pockets.

…he seemingly takes a shot at the Bill and Hillary Clinton Foundation, noting how family philanthropies can be the beneficiaries of what amounts to bribes in exchange for legislative favors. ‘Some contributions are subtle,’ he explains. ‘Donations to a member’s nonprofit foundation. Funding a member’s charitable pet project. Offsetting the costs of a member’s portrait to adorn the committee room.

And you won’t be surprised to learn that politicians are shallow, corrupt, and hypocritical.

The mystery man reserves special scorn for Sen. Harry Reid, a Nevada Democrat who serves as Senate Minority Leader. …One chapter is titled ‘Harry Reid’s a Pompous A**. …The larger picture that emerges is one of disenchantment with the political process and the professional office-holders behind it. Especially those in the Democratic Party. ‘Our party used to be a strong advocate for the working class,’ he says. ‘We still pretend to be, but we aren’t. Large corporations and public unions grease the palms of those who have the power to determine legislative winners and losers.’ ‘Most of my colleagues want to help the poor and disadvantaged. To a point,’ he adds. ‘We certainly don’t want to live among them. Or mingle with them, unless it’s for a soup kitchen photo op. … Poverty’s a great concern as long as it’s kept at a safe distance.’ …’I’m concerned my party has an activist far-left wing intolerant of center-leftists. …He cites education policy as an example: ‘I’m a strong advocate of improving our public schools. I also see the near-term value of vouchers and charter schools committed to lending a helping hand to disadvantaged kids. Especially inner-city kids.’ ‘Hell, most of us send our children to private schools and wouldn’t be caught dead sending them to public schools in places like DC.

That last section is really disgusting. Politicians will sacrifice other people’s children to appease the teacher unions, but they have the money to exercise school choice for their own kids.

So what’s the bottom line?

The mystery Democratic Congressman paints a grim picture.

‘Most of my colleagues are dishonest career politicians who revel in the power and special-interest money that’s lavished upon them,’ Atkinson recorded his mystery collaborator saying. ‘My main job is to keep my job, to get reelected. It takes precedence over everything.’ …the take-away message is one of resigned depression about how Congress sacrifices America’s future on the altar of its collective ego. ‘We spend money we don’t have and blithely mortgage the future with a wink and a nod. Screw the next generation,’ the author writes. ‘Nobody here gives a rat’s a** about the future and who’s going to pay for all this stuff we vote for. That’s the next generation’s problem. It’s all about immediate publicity, getting credit now, lookin’ good for the upcoming election.’

In other words, he’s describing what academics refer to as “public choice economics,” which is simply the common-sense observation that politicians are most interested in maximizing power and money for themselves.

P.S. If we can give a retroactive award for Politician of the Year, the winner would be the state legislator mentioned in the postscript to this column. Bribery, prison, and potential statutory rape are a potent combination.

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Once again, I threw myself on a proverbial grenade. Yes, that means I watched politicians last night as part of the Cato Institute’s live-tweeting about issues that were raised (or not raised) in the CNN Townhall featuring Bernie Sanders and Hillary Clinton.

Although painful, this exercise enabled me to share my thoughts on topics such as corporate inversions, Planned Parenthood, government-run healthcare, Obamanomics, and the morality (or lack thereof) of government-coerced redistribution.

But one issue I neglected was campaign finance, which was an oversight since both Sanders and Clinton made a big deal about the ostensibly corrupting mix of money and politics.

I confess that their arguments were somewhat seductive. After all, corrupt ethanol handouts and the cronyist Export-Import Bank only exist because politicians easily can raise tens of thousands of dollars by voting yes for these boondoggles.

Moreover, a law professor from the University of Minnesota made “The Conservative Case for Campaign-Finance Reform” yesterday in the New York Times. Here’s some of what Richard Painter wrote.

…big money in politics encourages big government. Campaign contributions drive spending on earmarks and other wasteful programs — bridges to nowhere, contracts for equipment the military does not need, solar energy companies that go bankrupt on the government’s dime… When politicians are dependent on campaign money from contractors and lobbyists, they’re incapable of holding spending programs to account. Campaign contributions also breed more regulation. Companies in heavily regulated industries such as banking, health care and energy are among the largest contributors. Such companies donate with the hope of winning narrowly tailored exceptions to regulations that help them and disadvantage their competitors. …conservatives…need to drive the big spenders out of the temples of our democracy.

I have no idea if Mr. Painter actually is a conservative, but he makes a superficially compelling case.

But then I remind myself of a very important point. The sun doesn’t rise because roosters crow. It’s the other way around. What Mr. Painter fails to understand is that there’s a lot of money in politics for the simple reason that government has massive powers to tax, spend, and regulate.

Politicians in Washington every year redistribute more than $4 trillion, so interest groups have an incentive to “invest” money in campaigns so they can get some of that loot. Those politicians have created a 75,000-page tax code that is a Byzantine web of special preferences, so interest groups have an incentive to “invest” money in campaigns so they get favorable treatment. And the politicians also have created a massive regulatory morass, so interest groups have an incentive to “invest” so that red tape can be used to create an unlevel playing field for their advantage.

By the way, I’m not saying that campaign contributions are improper, or even necessarily bad.

After all, political speech (and the money that makes it meaningful) is protected by the 1st Amendment. Moreover, some people give money simply for reasons of self defense. They’re not looking for handouts of favoritism, but rather are giving money in hopes that politicians will leave them alone.

Instead, I’m simply making the point that big government is what encourages unseemly and/or corrupt political contributions.

If I’m allowed to shift to a new metaphor, Sanders and Clinton make the mistake of putting the cart of campaign finance in front of the horse of big government.

There’s a great column in today’s Wall Street Journal on this topic. It’s motivated by corruption scandals in New York, but the lessons apply equally to Washington. Here’s some of what Tom Shanahan wrote.

…whenever a public official is found guilty of wrongdoing, there’s a call for new laws. Logic cannot explain the impulse. …If they’re not obeying the laws we already have, what makes anyone believe new statutes will change that? …a host of “good government” groups, such the New York Public Interest Research Group, proposed making the legislature a “full-time job” by limiting outside income.

Mr. Shanahan suspect these reforms will backfire.

That’s a major problem for limiting the size of government. An analysis of “The Length of Legislative Sessions and the Growth of Government” byMwangi S. Kimenyi and Robert D. Tollison, in a 1995 article in Rationality and Society, demonstrated that the more time Congress spent in session, the more bills were enacted, and the more expensive government grew. …A legislator with other work also has a better understanding of the economic conditions confronting the public than one who subsists on a government check. …Legislators with outside incomes are less susceptible to the pay-to-play temptation of campaign contributions. When your sole source of income is the public office you hold, the incentive is far greater to do anything necessary to get re-elected.

So here’s the bottom line is that there’s no reason to think new laws will reduce corruption. Indeed, more rules will probably lead to more sleaze since politicians will have an even greater incentive to exploit their positions of power.

The people who will get hurt, however, are the ordinary citizens who already lose out from the current system.

New York continues to suffer a net migration of citizens to other states, as people flee a growing tax burden. The last thing the state needs is a legislature working full time to spend even more taxpayer money.

By the way, I’m not under the illusion that “money in politics” is a solution. I’m simply saying that new rules about campaign finance and ethics won’t have any impact on sleaze and corruption.

Which is my message in this video from the Center for Freedom and Prosperity.

Allow me to make one final point on this issue. I think the proponents of further regulation and control in some cases have good intentions, but they are being extremely naive. Why would anybody think that politicians would approve rules unless the net effect was to increase the powers of incumbency?

Since I shared my video on the topic, I’ll close by strongly recommending that you watch this George Will video.

P.S. I warned last month that governments were engaged in a war on cash. Well, the Germans are planning a Blitzkrieg.

The German government is considering introducing a limit of 5,000 euros ($5,450) on cash transactions in an effort to combat money laundering and financing of terrorism. Deputy finance minister Michael Meister said Wednesday that…there’s “…we also have the problem of how to clear up money-laundering offenses properly” when large transactions are conducted anonymously. …Opposition Green Party lawmaker Konstantin von Notz tweeted that trying to limit cash payments “is a new fundamental attack on data protection and privacy.”

Since criminals will be modestly inconvenienced – at best – by such an initiative, it’s important to understand the real goal is easier tax collection. Indeed, I suspect Herr von Notz will change his tune once he realizes that the German government will get more money to waste if cash is restricted.

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I wouldn’t be completely distraught to have Clinton in the White House in 2017. But before concluding that I’ve lost my mind, I’m thinking of Bill Clinton, not his far more statist (though similarly dodgy) spouse.

You’ll see what I mean below.

In a column for National Review, Deroy Murdock has some fun by pointing out that Bill Clinton just unintentionally attacked Barack Obama.

Bill Clinton…unsealed an indictment against Obama’s economy. …Hillary’s “secret weapon” told Granite State voters Monday, “I think this election is about restoring broadly shared prosperity, rebuilding the middle class, giving kids the American Dream back.”

Why is this an attack against Obama?

For the simple reason that we haven’t had “broadly shared prosperity” during the Obama years.

…a far-left Democrat has been president for the past seven years. The economic stagnation that Clinton critiqued is Obama’s. In Obama’s first or second year, Clinton might have managed to blame Baby Bush’s massive spending, red tape, and nationalizations for America’s economic woes and middle-class anxieties. But in Obama’s seventh year, this excuse has rusted. Obamanomics has narrowed prosperity, dismantled the middle class, and snatched the American Dream from America’s kids.

Deroy then compared the economic recovery America enjoyed under Reagan with the far-less-robust recovery taking place today.

In the 25 quarters since the Great Recession, Obama’s average, inflation-adjusted annual Gross Domestic Product growth has limped ahead at 2.2 percent. During Ronald Reagan’s equivalent interval, which began in the fourth quarter of 1982, such GDP growth galloped at 4.8 percent. …The total-output gap between Reagan and Obama is a whopping $10.6 trillion. …Under Reagan, private-sector jobs expanded 23.6 percent, versus the average recovery’s 17.0 percent, and 11.6 percent under Obama — less than half of Reagan’s performance. If Obama had equaled Reagan, America would enjoy some 12.9 million additional private-sector jobs. …Under Reagan, real after-tax income per person grew 3.1 percent, compared with 2.5 percent growth in an average recovery, and 1.2 percent under Obama. Had Obama delivered like Reagan, every American would have accumulated an extra $21,306 since June 2009.

All of this analysis is music to my ears and echoes some of the points I’ve made when comparing Reagan and Obama.

But I want to augment this analysis by adding Bill Clinton to the mix.

And I want to make this addition because there’s a very strong case to be made that we actually had fairly good policy during his tenure. Economic freedom increased because the one significantly bad piece of policy (the failed 1993 tax hike) was more than offset by lots of good policy.

Here’s a chart I put together showing the pro-market policies that were adopted during the Clinton years along with the one bad policy. Seems like a slam dunk.

At this point, I should acknowledge that none of this means that Bill Clinton deserves credit for the good policies. Most of the good reforms – such as 1990s spending restraint – were adopted in spite of what he wanted.

But at least he allowed those policies to go through. Unlike Obama, he was willing to be practical.

In any event, what matters is that we had better policy under Clinton than under Obama. And that’s why it’s useful to compare economic performance during those periods.

The Minneapolis Federal Reserve has a very interesting and useful webpage (at least to wonks) that allows users to compare various recoveries on the basis of GDP growth and job creation.

I’ve used this data to compare Reagan and Obama, so now let’s add the Clinton years to the mix. The following two charts from the Minneapolis Fed show the post-1981 recovery in blue, the post-1990 recovery in yellow, and the post-2007 recovery in red.

These numbers don’t match up exactly with when presidents took office, but it’s nonetheless apparent that we got the best performance under Reagan, and also that Clinton was much better than Obama.

Here’s the chart with the job numbers.

And here are the numbers for gross domestic product.

Here’s the bottom line.

Party labels don’t matter. Policy is what counts.

When the burden of government expands, like we saw with Jimmy Carter and Barack Obama on the Democrat side, but also with Richard Nixon, George H.W. Bush, and George W. Bush on the Republican side, the economy under-performs.

Similarly, when the burden of government is reduced, like we saw under Bill Clinton and Ronald Reagan, the economy enjoys relative prosperity.

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Washington is a horribly corrupt city. The tax code is riddled with special favors for politically powerful interest groups. The budget is filled with handouts and subsidies for well-connected insiders. The regulatory apparatus is a playground for cronyism.

I’ve previously explained that shrinking the size and scope of government is the most effective way of curtailing corruption. Simply stated, people won’t try to get favors and politicians won’t have the ability to sell favors if government doesn’t have power to redistribute income and dictate behavior.

To be sure, this isn’t a recipe for zero corruption. There doubtlessly was corruption in the 1700s and 1800s when Washington was just a tiny fraction of its current size. But it’s a matter of scale. A smaller government means less opportunity for mischief.

Some folks argue that campaign finance laws would be an effective way of curtailing sleaze in Washington. And there are some compelling arguments for this approach.

After all, would we have unsavory examples of corruption like the Export-Import Bank if wealthy insiders from big companies weren’t able to generate buckets of campaign cash for politicians?

But let’s be realistic. So long as politicians have the power to provide subsidies for big business, they’ll have an incentive to offer those handouts. And companies will have an incentive to seek those handouts.

Campaign finance laws might cut back on one pathway to buy and sell favors, but the incentive to cut deals will still exist. Sort of like pressing down on one part of a balloon simply causes another part of the balloon to expand.

But, you may ask, isn’t it worth taking such steps in hopes of at least creating some roadblocks to graft in Washington.

Perhaps in theory, but let’s not forget that it’s very naïve to think that politicians will enact laws that reduce their power or weaken their chances of being reelected. That’s about as likely as burglars being in favor of armed homeowners.

As such, we actually should be concerned that new laws and rules somehow would be structured to make things worse rather than better.

That’s the message of this superb video from Prager University. Narrated by George Will, the video explains why so-called campaign finance rules are not the answer (unless, of course, the question is “how can we give more power to the entrenched political class?”).

Let me add something that wasn’t addressed in the video. Incumbent politicians like the idea of limiting campaign contributions because they start each election cycle with a giant advantage. They already are well known in their states or districts. They’ve already curried favor with voters by engaging in taxpayer-financed “constituent service.” They already get themselves in front of cameras at every opportunity when there’s a ribbon cutting for a new bridge or road project. And they’ve already built relationships with the power brokers in each community.

Challengers, for all intents and purposes, need to spend a lot of money – potentially millions of dollars depending on the electorate – simply to create a level playing field. But if there are laws that limit total spending or restrict contribution amounts, it makes it a lot harder to conduct a credible campaign.

No wonder incumbent politicians so often pontificate about “getting money out of politics.” What they’re really saying is “let’s make it impossible for anybody to threaten my reelection.”

The bottom line is that limits on campaign contributions and other restrictions on political speech make elections less fair.

And they don’t solve the bigger issue of graft, corruption, and sleaze. No wonder they’re willing to impose dozens – if not hundreds – of laws governing public malfeasance and campaign finance. They know that such rules are largely ineffective because much of what happens in Washington is legalized forms of corruption.

Which brings us back to the real issue. If you want less sleaze in Washington, reduce the size and scope of the federal government.

Everything else is window dressing.

P.S. The most pervasive form of corruption in Washington (and, sadly, in many other parts of America) is the moral corruption that exists when people think it’s perfectly acceptable to steal from their neighbors so long as 51 percent of the people approve of the theft. That’s why social capital is very important.

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