The Fast and Furious Investigation: Quick or Dead?

 | 

On June 28 the US House of Representatives voted 255-67 to hold Attorney General Eric Holder in contempt of Congress for failing to provide documents subpoenaed by the Oversight and Government Reform Committee. Although the vote was largely along party lines, it still represented the first time in American history that a cabinet member has been found in contempt of Congress.

Partisan or not, the contempt vote was more than justified by the facts. The attorney general has stonewalled Congress’ investigation of Operation Fast and Furious, a crazy policy which amounted, in substance, to running guns into Mexico with the expectation that this would lead to prosecutions and the interdiction of weapons trafficked to Mexican drug cartels. One US border patrol agent has already died as a result of Fast and Furious, as have an untold number of Mexicans. Hundreds of the guns remain in the hands of criminals who will not hesitate to use them to kill people. While it should be noted that tactics resembling Fast and Furious were first employed by the Bush Justice Department, the stupidity was ratcheted up in a big way under Holder. In any case, the attorney general has provided Congress with about one tenth of the documents under subpoena, and contradictions have cropped up in his congressional testimony. The whole business stinks, and yet the scandal remains (except on the Fox News channel) for the most part under the radar screen.

On the day of the contempt vote I heard some talking head on a cable news program declare that the timing of the vote showed that the Republicans were not veryserious about pursuing their investigation. On the contrary, the vote was scheduled to coincide with what the Republicans thought would be an overturn of Obamacare by the Supreme Court — the second blow of a double whammy that would jumpstart the Republican effort to take the White House. This plan backfired when Chief Justice John Roberts found a way to declare Obamacare constitutional. The unexpected reversal of fortune for Obamacare washed the contempt vote right out the public consciousness.

It is a fact that the New York Times and the Washington Post have done little to get to the bottom of Fast and Furious. Nothing illustrates the mainstream media’s bias in favor of Obama more than its (non)response to this scandal. Even less surprising is the absence of a Democrat version of Howard Baker asking publicly “What did the attorney general (and possibly the president) know, and when did he know it?” Obama is no Nixon, but Holder might be another John Mitchell. We’ll never know for sure, because Holder, unlike Mitchell, will never wind up in the dock (the Justice Deptartment is not about to file criminal contempt charges against its own AG). So much in life depends on who you are, and even more on who your friends are.




Share This


Like Father?

 | 

Republican Rand Paul, scion of libertarian lion Ron Paul, has done something amazing.

He has endorsed the Republican candidate for the presidency.

Libertarian movement chronicler Brian Doherty put the situation nicely when he said, “There are a lot of Ron Paul people who like to think of themselves as a ragtag rebel army. But Rand Paul is clearly positioning himself to play the part of the loyal opposition. Emphasis on loyal.”

That he endorsed Romney was bad enough to some ofhis father’s supporters, but that he did it while his father was still seeking the nomination (even if not actively campaigning) was especially galling. Here are a few of the comments Rand Paul’s action elicited online:

  • “Nothing but a Judas! Burn in hell Rand!”
  • “Shame on you rand . . . you sold out on everything your father stands for . . . Damn you.”
  • “I did not donate my treasure and time to end up supporting flip-flop. I feel like a deal with devil has been made.”

My favorite, though, is this bit of conspiracy theory: “The only thing that makes sense is that they must have lured him in with a hot woman and set him up with photographs of the event. . . . No son would do this to his own father.”

I dunno . . . maybe he was enticed by a whole group of hot women. Or maybe he figured that: (a) Obama is infinitely more distant from Paul’s principles than Romney is; (b) Romney has a good chance of winning; (c) in office Romney will have people of all ideological persuasions trying to influence him; and (d) by being one of those voices, Rand Paul will be able to advance his own principles.

I think the second "maybe" is the likelier one. I also note that Rand Paul has followed his endorsement of Romney with an essay strongly criticizing Romney's position on war, foreign policy, and the Constitution itself. Apparently there weren't enough of those women.




Share This


The Hoot-Out at the OK Corral

 | 

Say, what is it with these lousy mouse-munchers? Every time you turn around, the damned spotted owl is making people’s lives miserable, with the able assistance of the federal government.

A story out of Tombstone, Arizona, reports that the legendary town — erstwhile home of Doc Holliday and the Earp Brothers, and venue of the most famous gunfight in Western history, the OK Corral — is being destroyed by the US Forest Service. Yes, this storied burg that survived the guns of the outlaw Cowboy gang (Ike and Billy Clanton, Tom and Frank McLaury, and Billy Claiborne) is in danger of being throttled by the talons of the now legendary bird, backed by the now infamous Forest Service.

You see, last summer there was a fire in the nearby mountains, where the springs that provide water for the town are to be found. The fires burned away the ground cover, and recent rains have washed away part of the 26-mile pipeline that brings water into town. The pipeline has been there for over 130 years and needs to be repaired quickly, or the next round of rains will wash it away. Since Tombstone’s reservoir has run dry, this will pretty much kill the town.

Enter the owl. Forest Service rangers have discovered a nest of spotted owls — Mexican spotted owls, to be precise. Pero caramba! The species has been declared “endangered” (in the United States) so the Forest Service is trying to stop the town’s residents from using machinery to repair the pipeline.

Tombstone has gone to court, saying that since it owns the springs in question, it shouldn’t need the federal government’s permission to rebuild the pipeline. (The town is defended by the wonderful Goldwater Institute, and hundreds of ranchers, not to mention Western fans, throughout the West.) The feds respond that the town is just using this as an excuse to expand its water supply — a horrible sin, no doubt, for a desert town. Why exactly the construction equipment would harm the birds, which managed to survive the fires, is unclear — but then, almost everything the Forest Service does is unclear.

Its mindset is revealed by the answer one of its supervisors gave in court to the question, “What is more important, owls or the people of Tombstone?” The moral idiot replied that it is hard to say.

And so far the Forest Service is winning, of course, in federal court. The US Supreme Court just recently turned down Tombstone’s request for an emergency injunction to allow the use of construction equipment to repair the pipeline. The Forest Service will only allow individuals using hand shovels to do some repair work, in the 100 degree heat.

So an historic town may die because the government is worried about whether a couple of tractors will scare away Mexican spotted owls, however many of them there are. The Tombstone epitaph will wind up reading, “What the Cowboys could not kill, the Spotted Owls did!”




Share This


Abundant Resources

 | 

Free market advocates have long argued that there is no shortage of fossil fuel (oil and natural gas) in the US, for as long as that is going to be the dominant energy source in this country — in other words, for the foreseeable future. We have argued that the US ought to use its own abundant supplies.

We argue this on national security as well as economic grounds. Building regulatory walls against exploiting our abundant fuel reserves deprives the nation of jobs and wealth, so it is economically stupid. This is obvious. But it should also be obvious that those walls channel money to regimes that wish us all manner of ills, even extermination — so the restrictions are strategically stupid. We send ever more troops to ever more dangerous places, so we can keep importing that which we have utterly no need to import.

It is with interest, therefore, that I note the complete lack of interest shown by the mainstream media in the congressional testimony of the federal government’s own Government Accountability Office (GAO) regarding America’s fossil fuel reserves.

The GAO reports that the Green River Formation of shale (which lies under the area where Colorado, Utah, and Wyoming join) contains the world’s largest known oil shale deposit, holding an amount of recoverable oil equal to all the world’s proven oil reserves. In fact, Anu Mittal, director of natural resources for the GAO, testified that the formation contains about three trillion barrels of oil, about half recoverable with known technology. And remember — we can only guess at future technological improvements.

In fact, the GAO now estimates that the US has more by way of fossil fuel reserves than any other country on earth by far, with Russia in second place and Saudi Arabia a distant third. Bottom line: even while Obama is telling the public that we use 20% of the world’s oil and have only 2% of the known reserves, his own GAO reports that America has the largest reserves of fossil fuel on the planet.

But while Russia, Saudi Arabia, and other energy endowed countries are moving ahead to develop what they have, our government would rather block our own development. Go figure.




Share This


Schools: What Kind of Reform?

 | 

Now that Governor Scott Walker has won the recall election, Wisconsin is pushing through the education reforms that were part of his 2010 legislative agenda. Like most education reform initiatives, Wisconsin’s contains some form of merit-based teacher pay and a voucher system. Indiana has proposed similar reforms, and Louisiana Governor Bobby Jindal and New Jersey Governor Chris Christie have made national headlines with education reform plans that in some ways resemble Wisconsin’s.

The proposals are pushed by Republicans who tout them as free-market solutions to the education problem in their respective states. But what they don’t say, or perhaps don’t see, about their proposals may make the system worse than the one we have.

Teachers object to having their pay tied to student performance. But this is what happens all across the private sector. If a manager’s employees are not doing what the company demands, the manager will be replaced. Likewise, if a high school coach’s team doesn’t win enough games, the coach will be replaced. Teachers must be held accountable if their students are not learning, and be rewarded if they are. It is time they were held to the same standard as everyone else.

The practical problem isn’t whether teachers should be assessed, but how they should be assessed. Yet that means there’s still a problem.

Standardized tests are the primary measure by which we judge a student’s level of achievement, and changing our measure of achievement must be among the first reforms enacted. Standardized testing prohibits experiential learning and diminishes the value of differentiated instruction. As an educator, I have found that certain topics are more attractive to students than other subjects, and those topics change from year to year and class to class. For instance, in 2001 my ninth-grade world history class we dedicated significantly more time to world religions, particularly Islam, than had originally been planned — because of what happened on 9/11. Had there been a standardized history exam I would never have been able to capitalize on the students’ interest, and we all would have missed out on a teachable moment.

So whatever measure states use to evaluate teachers must not limit their flexibility or autonomy. This goal is doubly difficult to achieve, however, when government enters the picture, even in the form of a school voucher system.

Supporters of school choice ground their argument in free-market principles. Opponents object that tax dollars will be siphoned away from already cash-strapped schools. The reply is: “If you want the money, you must earn it.” Where there is a monopoly, providers become inefficient and weak. Where there is competition, we see innovation and greater progress. A school voucher program works to break the monopoly to allow free market mechanisms to enter the education system. Ironically, however, it is the government that is seeking to instill this aspect of the free market.

We should be wary of that. If the government begins, indirectly, to fund private schools through vouchers, the schools will not have to be as competitive when trying to secure funding either from student tuition or from donors.

Any time government takes action there are unintended consequences, and there are at least two educational consequences that we can see looming on the horizon already. The first is an undermining of free market principles. The second is the opportunity for government to regulate private schools, with vouchers being construed as funded mandates. If private schools begin to depend on indirect government funding, then the government can gain leverage over what these schools teach and how they teach it.

There is no easy solution to our education problems. Problems with education have been documented for more than two millennia. No reform or policy will be the final solution, for education is a process, and improving it should be seen in the same way. Which is why, in the end, we should advocate reforms that promote the greatest amount of flexibility and accountability.




Share This


Would You Buy a Used Poll from These Men?

 | 

On Tuesday evening, June 5, two hours after voting closed in Wisconsin, the Los Angeles Times website was still headlining a story about how its exit polls projected an extremely close race — at a moment when the bulk of the vote was in, and Republican Governor Walker was running almost 20 points ahead of his opponent, Democratic Mayor Barrett of Milwaukee.

An hour before, CNN had somehow revised its exit-poll projections from 50–50 to a modest 52–48 for Walker. Even Fox News’ exit polls indicated a race that was “knife-edge” close. These polls were remarkably wrong. All the predictions were, including the predictions that brought 400 Democratic lawyers into Wisconsin, determined to contest a close election. (Wouldn’t you have loved to see those suits trooping off the plane in Milwaukee, cellphones and briefcases at the ready?) Walker won by a margin of about 7%, somewhat unusual in seriously contested American elections, but the same as President Obama’s national margin in 2008, sometimes hailed as a “landslide.”

Nevertheless, about an hour after CNN finally projected Walker as the winner, its hapless anchorman, John King, was still talking about the exit polls. While they were somewhat off, he said, they still indicated that Obama was way ahead of Romney in Wisconsin. Having said that, he turned to a map of the United States and changed Wisconsin from an expected Obama victory to a toss-up. Then, half an hour later, he opined, “Our exit polls clearly undercounted Walker” (yeah, do you think so?), but added that we shouldn’t project the Wisconsin results onto the national election in November. (Maybe — why not?)

Still later, with 80% of the votes in and Walker running 12 points ahead , King was prompted by his younger colleague, Erin Burnett (who, thank God for intelligence, kept harping on the disparity between polls and performance), to speculate about what had (obviously) gone wrong with the exit polls. Thereupon King babbled things about how you might overestimate something in an exit poll, or “guess” wrong, and that’s why you need to correct the exit polls when the actual votes come in. Huh? So what’s an exit poll? And what’s a poll? And why should we worship them? A commercial break; then King was asked another embarrassing question about the polls’ failure to predict what happened. He replied, “The exit polls were weighted anti-Walker, pro-Barrett.” Pardon me? What did he mean by that?




Share This


Beer Battle

 | 

Here in Alabama we beer drinkers are still warring with the state. We won our most recent engagement, however. On May 16, the governor signed a bill allowing our favorite elixir to be served in 25.4-ounce, rather than 16-ounce, containers.

Of course, the goal of the state had been to keep large quantities of beer out of the lower colons of our young people. This assumes a school system that doesn’t teach that 2 times 16 is 32 and 3 times 16 is 48 — both larger than 25.4.

A couple of years back, in 2009, we legalized beers with over 6% alcohol. So we’re definitely making progress.

The opposition filibustered the large-bottle bill, ranting that alcohol had “broken up many families.” Yeah, I guess. So has fried chicken.

“Dear, pass me that drumstick.”

“But you ate the first one, and I want that remaining plump piece of chicken. Here’s a nice, crispy neck for you.”

The drumstick consumer throws the bone of the first — now deceased — drumstick at his “dear” dinner partner. (Not the half-full beer bottle, which she served without a glass.) Obviously, a freshman sociology student could observe this tension brewing for weeks.

And remember, all you legislators, he threw the chicken bone — not the beer bottle. So what’s beer got to do with it? More importantly, what’s the state legislature got to do with it?




Share This


Memo to Obama: Here’s How the Market Works

 | 

President Obama is running a political campaign as predictable as it is despicable. It is based on attacking capitalism. “Markets never work, government always does” appears to be his meshuggeneh mantra. As it happens, two recent Wall Street Journal stories illustrate the free market (disparagingly called “capitalism” by its opponents) in action. Obama might want to reflect on them, though it is doubtful that he often reflects on anything — he seems to be the epitome of a reflexive instead of a reflective person.

The articles, appearing on the same day and the same page, report on the impact of the fracking revolution in natural gas production, a revolution that has dramatically decreased the price of natural gas — by nearly half in the last year alone.

The first article reports some good news about the rock-bottom prices for natural gas. The price is inducing companies with trucking fleets to switch from diesel to natural gas (NG) — either compressed (CNG) or liquefied (LNG).

For example, Waste Management is now buying NG trucks. It plans to make 80% of the new trucks it buys over the next 5 years NG trucks. The NG trucks cost about $30,000 more than ordinary diesel trucks, but save more than $27,000 a year in fuel expenses. Ryder Systems, a truck leasing company, is making the same move, with one of its vice presidents saying, “The economics favoring NG are overwhelming.”

Other corporations shifting their truck fleets to NG include such huge players as UPS and AT&T.

The article notes the standard problems facing fleets looking to convert to NG, such as the need for bigger tanks, and especially the lack of CNG or LNG fueling stations nationwide. But as the fracking gas revolution continues apace, it is likely that the price of natural gas will remain extremely low compared to diesel, so will tempt more and more gas stations to offer NG fueling pumps. And the article doesn’t note how much cleaner NG is than diesel, which means that as air pollution laws continue to tighten, the cost of diesel trucks will go up. Nor does the article note that as more fleets convert to NG, the price of NG trucks will start to fall as production of them cranks up.

On the bad news side, the companion piece reports that natural gas “giant” Chesapeake Energy has been beaten up by the low price of its product and is now investing heavily in unconventional drilling for shale oil. Specifically, Chesapeake is focusing on the huge Utica shale formation lying under the state of Ohio, betting billions to buy leases for drilling rights to about 5% of the state’s land.

This is either ballsy or balmy, depending on your tolerance for risk. The Utica field is estimated to contain between 1.3 and 5.5 billion barrels of oil, but the company has drilled only 59 wells, and of the nine about which it has released data, the information shows that oil is but a third of what is provided — the rest being mainly that damned cheap natural gas!

All this simply illustrates the view of pricing that Hayek and Kirzner enunciated: that pricing is an information transmission mechanism — more simply, a language. The price of a product tells both producers and consumers how to alter their behavior and plans for the future. When the price of natural gas went up not so long ago, it told producers to produce more, and they did — in spades! Now that it has plummeted while the price of oil has remained relatively high, it tells consumers to switch to it, and it tells producers of natural gas and oil to shift capital from producing the former to producing the latter.

All this would be illuminating to Obama, were he a man capable of illumination. But he isn’t, so it won’t.




Share This


Should the Bank's Loss Be the Law's Gain?

 | 

The great thing about laws is that they protect us when we are unwilling and unable to do so on our own. Laws are great because they make sure no harm is done. So when it came to our attention that JP Morgan Chase just lost $2 billion because of risky investments and hedging, it may have seemed that what was needed was more and better laws, not personal responsibility.

Of course this isn't true.

Laws are necessary but not sufficient. Laws will never be able to keep pace with new developments in the financial sector, or anywhere else, which is why laws will never prevent problems but only react to them. And being reactionary instruments, laws cannot prevent the next wave of risky financial instruments or clever schemes to make money off of money.

In addition to not being able to anticipate problems, laws have unintended consequences that are sometimes worse than the problems they were designed to correct. Look at the laws that led to the housing bubble. For a time, the government, through various policies but primarily through Fannie Mae and Freddie Mac, infused more money into the housing sector than the market would have on its own. By making loans easy and affordable for people who would have otherwise not been able to secure home loans the government encouraged a misallocation of resources that drove up home prices.

Making loans available to people who would not have qualified without government interference pumped more money into the housing market than the market demanded. This drove up demand, which in turn drove home prices beyond market levels. Housing prices fell because the market corrected itself. This correction is what we recognize as the bubble bursting. The bubble and the burst were unintended consequences of the government getting involved in the housing industry.

In the banking and finance industry the government also distorts risk assessment, thereby forcing a misallocation of resources. Keeping interest rates low discourages saving and encourages investing. Low interest rates make putting your money in the bank an unattractive option if you want a return on your investment. So if you want your money to make money, you put it in the stock market. The government is essentially affecting the supply and demand of money rather than letting the market set interest rates and therefore determine where capital flows. This forces money into circulation that would otherwise not be there.

The banking laws we have in place encourage risk taking in other ways as well. First, banks the size of JP Morgan Chase know they will get government bailouts when they bet wrong, which means they can take whatever chances they want, and there is no risk involved. Second, the FDIC insures traditional deposit accounts up to $250,000, which means that no matter what kind of investments a bank makes with your money, as long as your account is below the $250,000 threshold, no one loses. Banks can fail in any number of ways without anyone involved failing to make money. The unintended consequence of government interference is an increased willingness of banks and their investment arms to take greater risks, which become no risks at all.

Certainly FDIC insurance has many benefits, as did the Wall Street and automotive bailouts, but there are unintended consequences that may have counteracted the favorable effects, if not encouraged the sort of risky behavior that created the need for the laws in the first place. The only solution is for individuals to take responsibility for their own actions. In view of our attachment to laws, this is an unlikely solution, but it is the only one with any promise.

Laws allow us to relinquish personal responsibility. When we make a bad investment that we did not understand entirely, or get into too much credit card debt because we failed to control our spending habits, it is easier to blame the lack of sufficient laws than to blame ourselves. If we were not motivated to make money we would have no reason to enter the stock market or make risky investments. But if we are motivated to do these things, the least we can do is spend some time understanding what we are getting ourselves into. If we don't understand what others are doing with our money, or understand the risk involved, then we shouldn't get involved. And if we do get involved with something we don't understand, we have only ourselves to blame. Laws can't help this; only we can. More time and energy should be directed toward cultivating character than toward crafting laws.




Share This


Social Insecurity

 | 

I feel remiss in not reporting lately on the most recent news concerning the crown jewel of the progressive liberal welfare state: Social Security. It is the ur-program from which all the other major programs (such as Medicare) were spawned. Over the years, I have periodically reported on its looming fiscal crisis, but I haven’t said much during the past year.

So it’s time to check up on the program that has elected so many generations of Democratic politicians. Surprise, surprise — it is accelerating downwards!

Start with that cesspool of fraud, Social Security Disability Insurance (SSDI). A report in the estimable Investor’s Business Daily informs us that Obama has set another new record. Not only is he the Debt President (having added more to the federal deficit in his short time in office than any other chief executive — nearly $5 trillion, more than the big-spending Bush spent in 8 years), the Food Stamp President (having added to the rolls of food stamp recipients more than twice the number of new recipients per year — over 4 million — than even the prior record-setter, Bush, who added 1.84 million yearly), and the Emigration President (having presided over a political economy in which a record number of Americans renounce their citizenship — nearly 1,800 last year, compared to about 200 in 2008). In addition to those titles, Obama is now the Disability President.

Yes, a record number of people have gone on SSDI during Obama’s benighted reign — a whopping 5.4 million. And the number is growing at a rapid clip: from January of this year through last month, an astonishing 540,000 more have been granted disability, and more than 750,000 have applied. Of the total (10.8 million) now on SSDI, half joined under Obama. America’s seemingly endless high unemployment is clearly taking its toll. Doubtless this will hasten the projected day of SSDI’s insolvency, scheduled already for 2018.

Turning to the Social Security retirement program (i.e., the main one), the news is grim again. As recently as 2007, the Social Security program ran a surplus of $186 billion. This dropped to a mere $3 billion the next year, and became a $49 billion deficit in 2009, in the depths of the recession. However, last year — a “recovery” year — Social Security ran a deficit of $45 billion. The program’s trustees now forecast a deficit of about $66 billion on average for the next six years. After that, the trustees project triple-digit billions in deficits. In 20 years — three years earlier than projected last year, the so-called trust fund (a bogus pile of IOUs from the federal government to itself) will be gone, at which point benefits will have to drop by 25%.

Strange to say, the Obama administration is far more concerned about whether Romney engaged in a mean prank half a century ago than about Social Security’s lack of solvency. Obama’s economic record is so wretched that one can see why he refuses to discuss the entitlement crisis. But why do the mainstream media refuse even to mention the government’s own report? Surely this report should be of immediate and vital concern to all the public. . . Oh, yeah — I forgot. The mainstream media, formerly noted for “investigative journalism,” has become the Amen corner of the Church of Obama.




Share This
Syndicate content

© Copyright 2013 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.