Daily Read - 2/23/10

Obama released health-care reform proposal yesterday, the first plan that can realistically be called "Obamacare", in advance of Thursday's meeting with Republicans.  Does anyone else think it's odd that Obama isn't taking his proposal to the Democrats first? What if they don't support it? ABC News reports "Congressional Democrats cautiously embraced President Barack Obama's new health care plan as their last hope for enacting a comprehensive overhaul." They feel the need to pass something, even if they don't like it, because "the chance won't come around again anytime soon."  "Cautiously embraced" does not sound like a ringing endorsement.

The Washington Post reports that his "proposal's most notable feature, he scales back the Senate bill's main revenue source, a tax on high-cost insurance that he has strongly supported. Instead, he would impose a new tax on the unearned income of the wealthy."  Economist Greg Mankiw thinks this is a mistake - higher taxes on expensive health plans would be an incentive to use less health care (and therefore reduce costs), while but the "unearned income" tax reduces the incentives for saving and investment.  In Mankiw's words, "the new proposal would do less to bend the curve of rising healthcare costs and more to impede long-run economic growth."

The Post also notes: "White House officials touted as the proposal's signature addition a new nationwide authority to review insurance rate increases," but that the "proposed authority is slightly less than meets the eye."  The authority basically amounts to price controls for health care, and Mankiw reminds us of the less-than-impressive history of price controls, citing this article.  The Cato Institute also weighs in against "Clintonesque" price controls, and even quotes Obama’s top economic advisor Larry Summers as saying "price and exchange controls inevitably create harmful economic distortions. Both the distortions and the economic damage get worse with time."

While claiming repeatedly that Republicans had no ideas and no plan for health care, the White House web site now says: "Throughout the debate on health insurance reform, Republican concepts and proposals have been included in legislation."  It will be interesting to see how Obama uses this in Thursday's televised meeting with Republicans.  In Cato's podcast on the price controls, Michael Cannon claims Obama hand-picked the Republican proposals that would get the least support from independents and libertarians and will use them to make Republicans look as "big-government" as possible.

Obama's plan also closes the so-called "doughnut hole" in Medicare's prescription drug coverage, making a Bush-era program that the President and Democrats repeatedly include among their "inherited" problems even more expensive.  Also, does Obama include this among his Republican ideas he is including?
The WSJ's editorial "ObamaCare at Ramming Speed" also says the proposal "purports to fix the special-interest favors in the Senate bill not by eliminating them—but by expanding them to everyone."  For example, "the White House claims to eliminate the 'Cornhusker Kickback,' the Medicaid bribe that bought Nebraska Senator Ben Nelson's vote, political appearances are deceiving.  As with the union payoff, what the White House really does is broaden the same to all states, with all new Medicaid spending through 2017 and 90% after 2020 transferred to the federal balance sheet. Governors will love this ruse, but national taxpayers will pay more."

In summary, the President's new health care plan contains little more than a mash-up of the existing House and Senate plans, plus a feature that makes them worse, and other feature that is politcally popular, but likely to do more harm than good. Or, as the Wall Street Journal puts it: "It manages to take the worst of both the House and Senate bills and combine them into something more destructive"
Keith Hennessey ponders  whether the President's proposal is a set-up for his exit strategy from healthcare reform.  "The President proposes a “compromise” and blames Republicans for being unreasonable and unconstructive. Legislative failure is the Republicans’ fault, not the President’s."  If this is true, it might explain why the President is so set on the event being televised.

In spite of all the opposition, Eugene Robinson of the Washington Post says Democrats should "Find your spines and pass health reform," then spends most of the article blaming Obama and the Republicans for the failure to not pass something already - contradicting the headline, which implicitly blames the Democratic super-majority that failed to pass anything.  He argues the last year of negotiating could have been a lot easier if Obama had been more clear about what he wanted (Side note to Robinson: Obama is not the boss of Congress).  Then Robinson says Obama's proposal is very similar to the Senate bill, and he is doing Republicans a favor by providing it as a "starting point" for discussions.  If Republicans refuse to back this bill, which only passed the Senate due to massive kickbacks to the health care industry, and huge bribes for the last few Senate votes, Robinson says "observers will be able to draw conclusions about who is being constructive and who isn't."  On the other hand, Robinson could have argued that it is very unlikely Republicans would support something that Democrats only barely support, but that would not have suited his political purposes.

Daily Read - 2/22/10

A Swiss court accused a fisherman of torturing a fish because it took 10 minutes to reel it in, and activists are lobbying that animals should have lawyers.  (AP story here; h/t Overlawyered.com)

Maryland Gov. Martin O’Malley, the vice chair of the Democratic Governors Association, said at a press conference that Congress should pass a jobs bill that includes “whatever they think is appropriate, as long as they do it quickly...the people of our country need to see us fighting...for jobs."  He also argued Democrats should "force Republicans to take uncomfortable votes against measures they've supported in the past. He thinks that would help Democratic candidates on the ballot this year, including him."  (Politico)  I thought the jobs bill was supposed to be about jobs, not about passing partisan bills quickly for the sake of public appearances and elections?  Proposing something just because you think the other party will vote against it is childish and a big part of the reason Americans are getting fed up with their government.  Voters don't want to see their politicians fighting any more - they want results.

"For a year, critics of the Democratic health care plans have been applying the label "ObamaCare" to whatever the current draft was," says Marc Ambinder at the Atlantic.  The President has now unveiled a comprehensive bill as a prelude to Thursday's meeting with Republicans, and Ambinder summarizes the highlights of Obamacare here.

Ambinder says Obama's "new insurance rate increase mitigation authority" will be hard to oppose politically (and will be used to make Republicans look bad), but that the policy probably won't work - citing this National Review column.  I take issue with Obama's grandstanding over "excessive rate increases" by health insurers here.

In the upcoming issue of Vogue, Treasury Secretary Tim Geithner says “You can’t do these jobs worrying about perceptions...You have to focus on improving real things that matter. To consider what is popular will lead you astray and you will have no integrity to do the important things that will make the country stronger.” (Jake Tapper, ABC News)

Five former Treasury secretaries wrote a letter to the WSJ in support of the "Volcker Rule," which would restrict FDIC-backed institutions from trading too much for their own profit, and restrict them from investing in hedge funds and private equity.  While this idea is great in theory, I'm still not sure where I stand on this one practically.  The letter was in response to a column by Alan Blinder on Feb 15, where he wonders if "the Volcker "idea" can be translated into a workable Volcker rule. It is devilishly difficult to draw bright lines between proprietary trading and trading, hedging, and market-making on behalf of clients."  It was the likely impact on FDIC-insured institutions that led to the bailout of AIG, so it makes sense for the government to be more strict about who does, and does not, qualify for FDIC insurance.  But, Fannie, Freddie, AIG and Lehman Brothers were not banks -- it wasn't proprietary trading and other investments by banks that caused the crisis, and what the "Volcker Plan" looks to regulate are not a significant part of their businesses.

The Economist weighs in on the challenges facing Obama's deficit commission.  Most importantly, the commission has no authority, unlike the commission voted down in the Seante that could "make recommendations which Congress would be forced to vote on (without amendment)."  Also, "It is scheduled to report by December 1st this year, shortly after the mid-term congressional elections," which postpones the issue until after the election.  The Tea Party movement may be loud and influential now, but the more time passes, the more likely their cries for serious fiscal reform will fade away.  If this commission and the next Congress fails to produce something soon, will it be too late?  On the positive side, the structure of the commission ensures some amount of bipartisan support for whatever it recommends.

Problems with Obama's Criticisms of Insurance Rates

The New York Times reports that the President "will propose on Monday giving the federal government new power to block excessive rate increases by health insurance companies." The policy is intended "to frame his debate with Republicans over health policy at a televised meeting on Thursday" by "seizing on outrage over recent premium increases of up to 39 percent announced by Anthem Blue Cross of California."

I have at least 4 problems with all of this: one about the uncritical media coverage, one about the political games being played, one about unintended consequences, and the last about the role of government.

1) news story after news story is reporting Anthem's rate hikes as "up to 39 percent". I have yet to find one news story that digs into this number. Out of the 700,000 affected customers, how many will see 39% increases? One? All of them? What's the average increase? Is anyone seeing a rate decrease? With all the coverage this is getting, you think someone would look into this instead of just repeating the number, which has the effect of supporting Obama.  This statistic is becoming the new "47 million Americans are uninsured."

2) The article says "the legislation unveiled on Monday will actually be the first comprehensive proposal put forward by the White House." The President keeps criticizing the Republicans for not having good ideas, but he comes out with new proposals, immediately before a televised meeting with them? I hope voters see that "seizing on outrage" = "pandering"; it does not equal good policy based on a long-term strategy. Senate Republican leader, Mitch McConnell said “If they are going to lay out the plan they want to pass four days in advance, what are we discussing on Thursday?”

3) The House and Senate health insurance proposals will require insurers to cover more high-risk patients, and will regulate how much more insurers can charge high-risk patients, compared with low-risk ones. To comply, insurers will have to raise rates overall, and particularly to low-risk patients because the new regulations are an explicit subsidy from the healthy to the sick. Part of these rate hikes are certainly due to the bad economy, but how much is a result of the oncoming Obamacare train? Is Obama criticizing something here that is actually the direct result of what he is proposing?  This WSJ editorial thinks so.

4) Who decides what is an "excessive rate increase"? If customers are not getting value for their money, they should be able to choose a different insurance plan. The government should take steps to increase competition so that consumers can make these choices, instead of waiting for a government panel to decide what is appropriate.

Weekend Read - 2/20-21/10

"After reaching the top of the podium at the 2006 Turin Olympics, [Hannah] Teter embarked on a charitable mission through her website Hannah's Gold (www.hannahsgold.com) to help an impoverished town in Kenya to acquire basic necessities...After finishing second in a grand prix event in Utah last month, Teter donated her $10,000 winnings to the earthquake victims in Haiti."  (Fox News)

Keith Hennessey has six economic ideas that he agrees with Obama on (some with caveats).

"When Yitta Schwartz died last month at 93, she left behind 15 children, more than 200 grandchildren and so many great- and great-great-grandchildren that, by her family’s count, she could claim perhaps 2,000 living descendants." (NY Times)

"In an attempt at transparency, Obama has decided to make public the list of all visitors after a 90-day lag to preserve security."  "More than 5.5 million people requested tours of the White House last year."  (Washington Post) Do casual tourists really need their names posted to a government website?

Daily Read - 2/19/10

Elton John thinks "Jesus was a compassionate, super-intelligent gay man who understood human problems." In case you're not sure who Jesus was, the NY Daily News can help. According to the story, He was "one of the central figures of Christianity." Who knew?

Philanthropy.com reports that Feeding America, the national network of food banks, raised 51% more money in 2009 than in 2008.  Kudos to the generous Americans and American organizations that continue to donate during this rough economy.  (http://feedingamerica.org/)  "Leaders of the anti-hunger group say the increase is in large part because donors recognize the extreme rise in demand for basic services like food and shelter as the economic crisis has taken its toll."

The Economist says don't blame the political system in the US - blame the President.  "America’s political structure was designed to make legislation at the federal level difficult, not easy."  Instead of understanding that the system is designed to stall legislation that isn't broadly supported "Mr Obama has done a lousy job of winning over Republicans and independents to the causes he favours."  "Rather than regretting how the Republicans in Congress have behaved, Mr Obama should look harder at his own use of his presidential power."

Charles Krauthammer agrees, and gives examples for Obama to follow: Reagan worked with Democratic House speaker Tip O'Neill on Social Security, Reagan worked with Democrat Bill Bradley on tax code reform, and Bill Clinton worked with Newt Gingrich on welfare reform.  America is only ungovernable if its leader fails to see that he is not always right.

Paul Volcker, former Fed Chairman and current advisor to President Obama, thinks "Reforming Social Security is “doable,” he said, in part by “jacking up the retirement age” and changing the benefit calculation so that it won’t rise as fast for higher-income Americans as it does under existing law."  He prefers reforming Social Security and preserving it as a "bedrock" retirement plan to the proposals in Obama's 2011 budget.

Americans can also do a better job of saving and depending on themselves for retirement.  Personal savings rates in the US have been very low, even negative, but are improving recently.  (Source: Bureau of Economic Analysis, via NY Times)

Daily Read - 2/18/10

This one from Mitt Romney: "in case you didn’t hear the late-breaking news, the gold medal in the downhill was taken away from American Lindsey Vonn. It was determined that President Obama is going downhill faster than she is." (h/t National Review)

Anthem Blue Cross recently announced health insurance rate increases of up to 39% for some customers in California.  This Wall Street Journal column explains the increases "are the direct result of the Golden State's insurance regulations—the kind that Democrats want to impose on all 50 states."  The "cost" of health care reform that the President, Congress, and the CBO measure is only the costs that would be the responsibility of the government. The entire cost to all Americans hasn't been estimated by anyone as far as I know, but it will be much, much larger than the government piece alone.

Cato's daily podcast discusses taxation of multinational corporations.  Obama has discussed stricter taxation of US-based companies that produce revenue in foreign countries.  The podcast argues this is a bad idea for 2 reasons: 1) US corporate tax rates are already the 2nd-highest in the developed world, and raising them would just cause more businesses to move out of the US, and 2) if a US-based business has to close an office in some other country, a business from another country will move in to take advantage of the local tax advantage.  The US can only control our policy, not the policies and actions of other countries.

Bruce Campbell, editor of "The Collected Works of F. A. Hayek," says the economic stimulus stimulated sales of Hayek's "The Road to Serfdom," a dense book from 1944 describing the dangers of social planning and big government.  How ironic.

Venture capitalist Bill Frezza's thoughts on "Why Washington Can't Reform Healthcare" -- "The healthcare industry runs on fake prices."  "Imagine the world's smartest food expert with access to the best culinary research trying to decide what the right price is for a ham sandwich. Once the price is set, that's it - selling a ham sandwich for more or less is against the law. Oh, and homeless people get free ham sandwiches. Refuse to serve them and you lose your deli license."  What happens if the price of pork spikes?

Some good stuff from Yahoo Finance today:

This article has the "Wackiest Tax Deductions for 2010," including someone who produced a diary written all in one color ink, and copyrighted after the relevant year, as documentation to an IRS auditor.

This one says that almost anyone would want to double their income, but there are reasons why many can't or won't that are usually about what you have to give up to earn the extra income.  Money can't buy happiness, after all.

Daily Read - 2/17/2010

In the Atlantic, Megan McArdle wonders why, among all the many government actions, the Obama administration is claiming the stimulus is the one that prevented a depression.  Only $287 billion of the $787 billion stimulus has even been spent, according to recovery.gov, and by McArdle's estimation, this can't possibly have added more than about 1% to GDP.  Not insignificant, but certainly not more important than all the other government actions put together, which is what they're claiming.

However, Joe Biden was on CBS's "The Early Show" today saying taxpayers have "gotten their money's worth" from the stimulus because 2 million jobs might have been saved. (AP via Yahoo)  Doing a little math, that works out to $143,500 per job.  That doesn't seem like a good deal to me, but perhaps "one of the least wealthy members of the Senate" thinks that's value for the money.  On the other hand, how many jobs have been destroyed because of fear of government regulation and the future taxes that will be needed to pay for growing government?

President Obama is expected to announce that he will create the "National Commission on Fiscal Responsibility and Reform" by executive order today to "to help bring down the federal budget deficit to 3% of gross domestic product by 2015, compared with nearly 10% today, and to propose ways to hold down the surging costs of government programs such as Medicare, Medicaid and Social Security." (WSJ)  Unlike the commission proposed by by Sens. Kent Conrad, D-North Dakota, and Judd Gregg R-New Hampshire recently, this commission "will not have the power to force Congress to cast politically unpopular votes. So the commission's report could wind up being another blue ribbon panel report that sits on a shelf somewhere, unless there is public pressure for Congress to act on the proposals." (CNN)  The President's logic seems to be that, because voters aren't pressuring Congress enough to spend taxpayer money more wisely, he should create a Commission that has no power, except that derived from voter pressure.  This makes no sense.  Unless, his logic is: I can take credit for being bipartisan and confronting big problems by ordering a commission to discuss the issue until after the next election!  On the positive side, Obama is expected to name Alan K. Simpson, a former Senate Republican leader, and Erskine B. Bowles, a top official in the Clinton White House as chairs of the commission (Washington Post)

Apparently Obama considers nuclear power plants too big to fail.  He announced $8B in Federal loan guarantees for the building of a nuclear power plant, although "Reports by Congressional Budget Office and Government Accountability Office have estimated that the risk of default for new nuclear reactors could be as high as 50 percent."  (Atlanta Journal-Constitution)

Surprise!  "Audit finds Census preparations wasted millions" (USA Today)

Daily Read - 2/16/10

NPR has an interesting story on companies that find people with Asperger's Syndrome "as a potential competitive advantage."  According to these companies, some data entry and software testing jobs are "a perfect fit," and are looking for more ways to provide opportunities.  "According to new data from the Bureau of Labor Statistics, less than 20 percent of the disabled population in the country has work."

"During the 1980s and ’90s only one new medical school was established," according to this NY Times article "Expecting a Surge in US Medical Schools."  Nearly two dozen medical schools "have recently opened or might open across the country...seeking to address an imbalance in American medicine that has been growing for a quarter century."

With Evan Bayh announcing he will not run for reelection, Jay Cost thinks "Susan Collins, [Ben] Nelson, and Olympia Snowe are the only true centrists left" in the Senate.  Cost adds that, due to the razor-thin 60-vote majority, Bayh was not as centrist as many think because "thanks to the legislative strategy designed by his party's leadership, he was obliged to support them as the critical vote over and over."  A sad state of affairs.

Thomas Sowell says to stop calling wealth "obscene."  "Poverty is obscene. It is poverty that needs to be reduced--and increasing a country's productivity has done that far more widely than redistributing income by targeting 'the rich.'"


Harvard law professor Elisabeth Warren argued in a WSJ opinion column that the "same Wall Street CEOs who brought the economy to its knees have spent more than a year and hundreds of millions of dollars furiously lobbying Washington." Thomas Hofler wrote a letter in response asking: "To which CEOs is she referring? Perhaps Stan O'Neal, James Cayne, Charles Prince or Richard Fuld? No, none of these folks have lobbied anyone for at least 18 months because, unlike Washington, Wall Street holds its leaders accountable." All of these CEOs are out of a job, and James Cayne, for example, lost over $1 billion of his personal money, which was in Bear Stearns stock. Many of those in DC who encouraged sloppy and reckless mortgage lending are still in Congress -- writing "reform" bills.


President Obama made some remarks on energy today, including that the US will "break ground on the first new nuclear plant in our country in three decades."  "This one plant, for example, will cut carbon pollution by 16 million tons each year when compared to a similar coal plant. That's like taking 3.5 million cars off the road."  I hope there's more to come!  Daniel Indiviglio at the Atlantic has "5 Reasons to Cheer Obama's Nuclear Ambitions."

The AP reports (via Google News) that Federal, state, and local governments are starting to sell real estate to ease their budget deficits.  Unfortunately, "Government has a history of selling real estate at an inopportune time, said Dan Fasulo, managing director of Real Capital Analytics."  On the other hand, "Pension funds, insurance companies and other institutional investors are eager to scoop up properties that offer the prospect of a steady return on their investment, said Jeff Friedman, principal at Mesa West Capital LLC."

John Stossel reports that lobbying increased 5% last year.  Why?  “Even when companies are scaling back other operations, many view lobbying as a critical tool in protecting their future interests, particularly when Congress is preparing to take action on issues that could seriously affect their bottom lines,” according to Sheila Krumholz, executive director of the Center for Responsive Politics.  When politicians make speeches about getting lobbyists out of Washington, they seem to forget that a lot of lobbying is defensive.  Larger government is likely to result in more lobbying, not less, and also a larger degree of government intervention in private business.

Some of this lobbying is done by unions, and Kevin Hassett writes in Bloomberg that "this president has been more in the tank for the labor movement than any U.S. president since World War II."  For example, "he included special restrictions on much of the economic-stimulus funds, requiring that large portions of the $787 billion be used only on projects involving unionized workers," and "cut deals with the United Auto Workers ensuring that they be the primary beneficiaries in the bankruptcies of Chrysler and General Motors. More recently, Congress exempted unionized workers from the 40 percent tax on high-end insurance packages in the Senate health-care bill."

“Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power” - Benito Mussolini

Daily Read - 2/12/10

Peter Wehner,a senior fellow at the Ethics and Public Policy Center, talks about three theories about the Democrats failure to pass their agenda in a Wall Street Journal editorial.  Theory #1 is that "American people are too stupid to govern," characterised by Slate's Jacob Weisberg who calls Americans "childish, ingorant...dodos." (here)  (Side Note: Can you imagine if someone said the education system in the US was failing because kids were "too stupid"?)  Theory #2 is that the Republican Party has "adopted an agenda of pure nihilism for naked political gain." (Michael Cohen in Newsweek, here)  Theory #3 is that the Senate is "ominously dysfunctional" and "no longer consistent with a functioning government."  (Paul Krugman in the NY Times, here)  Krugman seems to think that a party with supermajorities and the Presidency should be able to do whatever they want, and Weisberg and Cohen seem to be intent on offending as many people as possible.  I prefer Wehner's more simple explanation: "leaders championing unpopular causes find their agenda stalled and eventually defeated."  Why?  "The Founders set up a system of government that put a premium on slowing things down, on compromise, and on controlling passions. They intentionally made passage of massive legislation time consuming and difficult."  In America, a key to "functioning government" is that it does not over-reach.  Wehner says "No, America isn't 'Ungovernable'", but America is not meant to be over-governed.

Peggy Noonan, also writing on the WSJ editorial page, on the declining value of Obama not being Bush:

In the 2008 general election, appealing for the first time to all of America and not only to Democrats, they had one great gift on their side, the man who both made Mr. Obama and did in John McCain, and that was George W. Bush...But now it is 2010, and Mr. Bush is gone. Mr. Obama is left with America, and he does not, really, understand it.

Daniel Stone of Newsweek argues pork barrel politics is a good thing, if "done right."  He cites the common statistic that "about 2 percent of federal spending goes to isolated projects," but ignores the reasons I hate earmarks: 1) although an individual earmark may not have a large dollar value attached, it indicates that the Congressperson receiving the earmark may not have voted for the bill without it.  Therefore, the bill might pass based on these favors for local interests and not on the merits of the actual bill for the nation as a whole.  How many bills have passed on the basis of earmarks?  How much have those bills cost?  Until someone can answer these questions, the 2 percent number is meaningless;  2) earmarks do serious damage to the transparency and accountability of government.  People always tell me they know exactly what a politician believes because their voting record is online.  But, why they voted for those bills is not.  What if they made that vote in exchange for a pork project, or in exchange for a vote on another bill?

A debate about whether record-setting snow in Washington DC and much of the Northeast US has anything to do with global warming has been brewing.  Global-warming believers say deniers are confusing weather with climate, and that short-term trends don't matter.  The WSJ's "Best of the Web Today" blog says "for years, global warmists have claimed that the weather proved their claims about the climate."  Examples provided here, here, and a collection of clips here.  Therefore, deniers should not be attacked for pointing out the flaws in the case for manmade global warming based on discrete weather events.

While the massive amounts of snow in the Northeast don't disprove global warming, Nolan Finley's blog in the Detroit News points out another benefit of the snow: "With lawmakers stuck in their homes, they have not been able to adopt new spending bills for their friends and supporters, contemplate new taxes or order new regulations that intrude on our individual rights."


All Michigan day-care providers are now government employees and union members, and "union dues are being taken out of the child-care subsidies the state sends them."  Why?  "6,000 day-care providers out of 40,000 voted" in an election conducted by mail.  (John Stossel)  No word on what conditions would cause a state-wide childcare strike, or any benefits provided by the union, AFSCME, which is likely to use a lot of the money for political contributions and lobbying.

Daily Read - 2/11/10

In an interview with Bloomberg, President Obama seems to have changed his stance on Wall Street compensation, saying he doesn’t “begrudge” Jamie Dimon's $17 million bonus or Lloyd Blankfein's $9 million.  The president said that $17 million is “an extraordinary amount of money” for Main Street, but “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well...I know both those guys; they are very savvy businessmen.  I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system."  Tell that to all the people with pitchforks, and the people who made death threats against AIG executives last year.

“I know that there are Democrats for sure that we can work with to get things done, but you know what, those aren’t the Democrats running Washington right now,” said Wisconsin Rep. Paul Ryan, the ranking Republican on the House Budget Committee. “The Democrats running Washington right now tell people like me, ‘we’re not going to work with you, we’re doing it our way because we’ve got the votes, and we’re just going to run right over you.’ … You don’t have the common sense, hash-out-the-problem, thinking Democrats running the place right now.”  (ABC News)  However, Harry Reid may lose his seat, and Pelosi may lose the speakership.

Caroline Baum of Bloomberg says "Small Business has Some News for Big Government" (here)  Baum says the left and the right give their reasons for the lack of new jobs, but "Small- business owners list 'poor sales' as the numero uno problem."  Tax credits aren't the solution - "Employers aren’t about to pay a new worker $40,000 to earn a $5,000 credit unless that worker generates $35,000 of revenue", according to William Dunkelberg, chief economist of the National Federation of Independent Business.  Others said the government is canceling out its own policies if it provides a tax credit with one hand, but raises income taxes with the other (many small business owners are in Obama's "rich" category).  And, "Small-business owners aren’t going to expand when they may need the money to pay taxes next year."  One small business owner just wants the government to "“Stay out of our way.”  However, doing nothing scores no political points, but providing a tax credit and punishing "the rich" gives politicians two things to take credit for, even if the policies have no effect.

Laura Vanderkam has a column in the WSJ today arguing for free-market solutions to product safety: Consumer Reports and Good Housekeeping.  Their advantage?  "Good Housekeeping puts its own money behind all its endorsements. No government agency can say that."

"Fannie Mae and Freddie Mac said they will ramp up their purchases of some $200 billion in delinquent home loans that the two government-controlled mortgage-finance companies have guaranteed."  The two firms "have required $111 billion in capital infusions from the U.S. Treasury to stay afloat. In December, the government said it would stand behind unlimited losses over the next three years, up from the previous limit of a combined $400 billion."  (WSJ)

"Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders...Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits."  (NY Times, September 30, 1999)

"The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago...The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac...is broken."  'These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''  (NY Times, September 11, 2003)