"The agribusiness industry plowed more than $80 million into lobbying last year, according to the nonprofit Center for Responsive Politics, which tracks spending on lobbying. Much of that was focused on the farm bill...
Farmers and their allies in Congress say a victory is all to the good because the bill, which is typically renewed every five years, is designed to provide farmers with a safety net through cycles of boom and bust. The heady times of the 1970s, when crop prices soared as the Soviet Union gobbled up American grain, devolved into the farm crisis of the 1980s, leaving farmers buried in debt."
Two thoughts: 1) it just goes to show that special interests influence every corner of Washington, regardless of party affiliation. How are farmers any less "greedy" than any other corporate lobby? 2) Why is it that farmers specifically get a safety net through cycles of boom and bust? Why not accountants and nurses and mommies and daddies? Why do they get subsidies while the rest of us don't?
"House of Politics" WSJ editorial:
So much good stuff to talk about.
"The media coverage of Mr. McCain's speech has portrayed his approach as laissez-faire, and the Clinton and Barack Obama campaigns quickly assailed it on those grounds. But that's true only in the sense that Mr. McCain didn't endorse any vast, new government rescue of bankers or borrowers. If this is laissez-faire, we've come a long way from Adam Smith."
Continually growing legislation and regulation does nothing to promote laissez-faire. Something's going to come down from this and it isn't going to be pretty.
"[T]he Arizona Senator framed his policy response around personal accountability for bad choices."
Any kind of policy response should be directed at getting government out of the way of people's choice and accountability. Any different creates perverse incentives.
"The Senator is less helpful in asking for some grand meeting of mortgage lenders to "help their customers and their nation out." If he means a willingness to help some borrowers work through their cash shortfalls, then nearly all lenders are already doing that. But Mr. McCain also offered the dubious analogy to General Motors's 0% financing offer after 9/11. As we recall, GM was offering that to new-car buyers, not to people who already owned their autos. If Mr. McCain is asking lenders to rewrite their mortgage contracts across the board, he's getting very close to Hillary Clinton-land...
[Clinton's plan to freeze interest rates] would amount to the broadest price controls in the U.S. economy since the Nixon Administration. Mr. Obama has said this abrogation of contracts would do nothing to help the market clear and would only drive up borrowing costs."
"What Tata Tells Us" WSJ op-ed by Matthew Slaughter:
"American policy makers should strive to make the U.S. a premier location for the dynamic, high-productivity activities of globally engaged companies -- both insourcing companies and U.S. multinationals alike. To truly be such a location would require dramatic progress on many fronts: renewing the president's trade promotion authority; resuscitating the World Trade Organization's Doha Development Round; passing comprehensive immigration reform. But to start such a journey with a single step, let us all pause to appreciate yesterday's good news from Tata."
I remember back in the 80's seeing commercials encouraging people to buy American cars. What are American cars: cars made by GM or cars made in the US? I know people working at the Mercedes Benz plant in Alabama or the Hyundai plant in Georgia don't mind if you buy "foreign" cars. We can continue to encourage foreign companies to build and invest here by keeping our tax laws competitive and creating an atmosphere that lets business operate.
"Regulatory Overkill" WSJ op-ed by Allan H. Meltzer:
"Their diagnosis is wrong. Mistaken regulation contributed greatly to the current problems in financial markets. Take the 1970s Basel agreement between developed country governments, which followed bank failures in Germany and the U.S. The idea was to have equivalent risk standards in all the principal lending countries. The agreement required banks to increase their capital if they increased mortgage loans and other risky assets.
The banks responded, however, by developing instruments that avoided higher reserves by moving risky loans off their balance sheets. Risk moved to all corners of the global marketplace. We find out who holds the risky assets when they announce they are about to fail.
The response to the Basel regulation is not unique. The first principle of regulation is: Lawyers and politicians write rules; and markets develop ways to circumvent these rules without violating them."
A similar argument can be made with respect to taxes. We raise rates, then give companies loopholes, then watch them spend billions to consultants and lawyers to help them exploit the loopholes. Why not lower the rate and cut the loopholes? The IRS (ie taxpayers) save money chasing people down and making sure they paid enough and businesses have more money to invest in their operations or pay employees or themselves. The argument for decreased regulation really isn't much better.
"Obama calls for $30 billion stimulus plan" from Reuters:
"Democratic presidential candidate Barack Obama proposed greater government regulation of the U.S. financial system and a new $30 billion economic stimulus plan on Thursday in response to the housing crisis."
See above regarding regulation. I think we should call him "O Big Spendin' Obama". All of his policies are very expensive. He plans on cutting taxes on the middle class, effectively creating another group of the population that doesn't add to the pot, while raising taxes on the rich, increasing their proportion of the funding.
"A Foolish Immigration Purge" NYTimes editorial:
"Leave it to the Bush administration to throw thousands of law-abiding American workers and companies off a cliff in perilous economic times.
That would be the effect of its decision to press ahead with a bad idea: to force businesses to fire employees whose names don’t match the Social Security database. The purge is part of a campaign — along with scattershot workplace raids and the partial border fence — to make a show of tackling the broken immigration system...
The burden on law-abiding companies would be great: thousands of dollars to comply with the rules, and thousands more to fire and replace workers. An honest employer who does things by the book would face an excruciating choice — to keep good workers despite dubious “no-match” letters and face harsh fines, or to fire them and face discrimination lawsuits.
All this churning, meanwhile, will be a boon for the unscrupulous businesses that hire off the books and have no use for W-2s. It’s a law-and-order strategy that undermines law and order."
As to be expected, a NYTimes editorial critical of Bush, but I agree, even if the only reason Bush is taking this route is because of political pressure from the conservative base. We have one law, limited immigration, that is short-sighted policy. The, because the incentives exist, a desire to feed your family and the profit motive, for workers and employers to skirt that law, they do. Next, after years of looking the other direction, the government is spending lots of money to try to enforce the law, which again is short-sighted, but is especially so during a period of economic uncertainty. This in turn creates further incentives to work around the law because the original incentives to skirt it are still there.
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