Tag: Congress

“The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true.”

9:27 pm

From the man whose job it was to police the $700 billion TARP bailout:

The suspicions that the system is rigged in favor of the largest banks and their elites, so they play by their own set of rules to the disfavor of the taxpayers who funded their bailout, are true.

The regulatory culture of the banking industry that this book describes possibiy explains why Jon Corzine has not yet been prosecuted. Regulators and prosecutors are afraid to proceed out of fear of hurting their careers.

Worse, Barofsky describes a banking regulatory system that is still in place, and is therefore ripe for another collapse. No wonder the tea party movement was born out of outrage over TARP and the bank bailout, and is still growing.

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A proposal by three Republican senators to avoid a “lame-duck looting session” after the November election.

3:46 pm

A proposal by three Republican senators to avoid a “lame-duck looting session” after the November election.

DeMint, Graham and Johnson want their House GOP counterparts to act before the August recess to fund the government through early next year. That would avoid the threat of a government shutdown before Sept. 30 and leave it in the hands of a new Congress and, perhaps, a new president.

What a concept! A proposal that the present Congress do its job now, rather than wait.

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Democrats in Congress proposed on Friday creating a federal program to develop and implement “forensic science standards.”

9:04 am

Democrats in Congress proposed on Friday creating a federal program to develop and implement “forensic science standards.”

The bill calls for the creation of a forensic science committee chaired by the National Institute of Science and Technology (NIST), which would assess how to best handle material from a crime scene, for example, and issue guidelines. Meanwhile, basic research into new forensic science tools and techniques might fall under the guise of a proposed National Forensic Science Coordinating Office, housed at the National Science Foundation (NSF). Over the next five years, the bill would provide $200 million in grants for forensic science research, and $100 million for the development of forensic science standards.

Two new federal agencies, costing millions. Gee, I wonder where these Democrats think the money will come from? And that ignores the more fundamental question of what business is it of the federal government to do this? Law enforcement is a state issue.

If this bill passes (which I suspect is quite unlikely), all it will probably accomplish is to create a new bureaucracy in Washington (jobs for the buddies of these politicians!).

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At least 80 House Republicans have signed a letter demanding that Speaker John Boehner (R-Ohio) block any further funding of Obamacare.

7:24 pm

At least 80 House Republicans have signed a letter demanding that Speaker John Boehner (R-Ohio) block any further funding of Obamacare.

This story illustrates two things. First, the House Republican leadership has been timid about using its power to block the implementation of Obamacare, even though the public clearly wants it blocked. Second, that about a third of the House Republican membership has already signed the letter, with more signatures expected, suggests that the bulk of the Republican Party is not as timid as their leadership. Moreover, I expect the November election to significantly strengthen this fiscally conservative trend.

Thus, it will not surprise me if we see some very radical budget cuts in the next Congress.

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A Tea Party event today in Tucson

10:28 pm

Last week I received an email from the local Tucson tea party, asking if I would be willing to attend a demonstration today in response to last week’s Supreme Court decision on Obamacare. To quote the email,

We would like to stage two simultaneous protests against the train wreck they call ObamaCare, at two separate locations Monday July 2nd, 4:00pm-5:45pm. 75 people at both locations are needed to make the necessary impact. They say the Tea Party is dead. What say ye? We need your commitment.

Today those protests took place at two different prominent street corners in the Tucson area. At each location there were about fifty people lining the sidewalk and holding signs and American flags out to passing motorists. My wife Diane and I went to one of those protests. Here are my impressions:
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NASA today unveiled for the press the Orion capsule scheduled for the program’s first test flight in 2014.

9:35 pm

NASA today unveiled for the press the Orion capsule scheduled for the program’s first test flight in 2014.

Today’s unveiling was essentially a PR event designed to boost political support for the Space Launch System (SLS) and the Orion capsule program. And though we should definitely give kudos to Lockheed Martin for its progress on Orion, it is also important to note that the building of this capsule took 8 years and about $6.5 billion. And it won’t go into space for still another two years at best. Compare that to SpaceX’s Dragon, which took about four years from concept to launch, with a cost of about $1 billion.

It is this contrast that is worrying the political supporters of SLS and Orion. Consider for example this quote from the above article:

But the Orion schedule assumes steady funding by Congress, which is an open question given the current debate over federal budget deficits, taxes and a general push to reduce federal spending. “We have to be concerned about that because we are in an era of government spending where you have to do more with a limited amount,” Nelson said. “That, of course, is going to be one of the main things we’re going to have to look at in the future.” [emphasis mine]

Nelson has been a big backer of SLS from the moment Congress decided to force it down NASA’s throat. It is very clear from his comments above however that he recognizes the political difficulties that this very expensive program faces.

As I’ve said before, I expect SLS to die sometime in the next three years. Faced with a ungodly federal deficit, the next Congress is going to look for ways to save money and — assuming the commercial space companies like SpaceX continue to have success — Congress will see this program as one of those ways.

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A Modest Proposal

9:48 am

“A Modest Proposal.”

Now that the Roberts Court has affirmed that the government has the power to mandate purchases of private goods and services as long as it’s structured as a tax, I propose that we put this new-found authority in the service of an explicit Constitutional right. For far too long, too many Americans have suffered from an inequal distribution of firearms, despite the Second Amendment’s express exhortation to “keep and bear arms,” in large part because income inequality in this nation has kept the poor and working classes from having the proper protection for themselves and their loved ones. We need to end this disparity now by applying the ObamaCare model immediately.

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The Dodd-Frank downgrade.

10:11 am

The Dodd-Frank downgrade.

What comes through in the Moody’s assessment [the credit-rating downgrade of 15 banks] and in any review of their returns on equity is that banks have lost significant ability to generate earnings to offset the inevitable losses. The lost earnings power is surely due in part to reduced leverage, which helps protects taxpayers.

But 2,300 pages of Dodd-Frank and countless other federal efforts to put sand in the financial gears are also taking their toll. The Obama tax and regulatory frenzy, of which Dodd-Frank is a part, weighs on economic growth. Those are our words, not Moody’s, but the rating agency does note that the abysmal economic environment is a drag on ratings for everyone.

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The House yesterday proposed a spending bill that would cut the EPA’s budget to $7 billion, 17% less than what it received in 2012.

3:09 pm

Progress: The House yesterday proposed a spending bill that would cut the EPA’s budget to $7 billion, 17% less than what it received in 2012.

Considering the federal debt, this is a reasonable cut, as a $7 billion budget would be comparable to the EPA’s budget numbers in the early 2000s, and would hardly cripple that agency.

On a more depressing note, the Senate is moving forward on a bi-partisan deal to pass a massive farm bill, loaded with pork that would spend almost a trillion dollars over the next decade.

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The real estate crash: We’ve only just begun

11:37 am

A real estate industry group today announced that there was a nine percent jump in foreclosures during the month of May.

RealtyTrac reported that 205,990 U.S. properties received filings last month, including default notices, scheduled auctions and bank repossessions, marking the first monthly increase since January. Bank repossessions climbed steeply, up 7% to 54,844, after hitting a four-year low in April.

The report also noted that foreclosures made up 26% of U.S. home sales in first quarter and that more than 30% of mortgage borrowers were still underwater.

As someone who just moved to Tucson and spent more than six months searching for and finally purchasing a home, I can add a bit of personal experience to these dry statistics. And my perspective is sadly not encouraging.
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Congressman Frank Wolf (R-Virginia) has backed down and modified the language he had inserted in the NASA budget bill that would have limited the number of commercial space companies NASA could subsidize.

3:59 pm

Good news: Congressman Frank Wolf (R-Virginia) has backed down and modified the language he had inserted in the NASA budget bill that would have limited the number of commercial space companies NASA could subsidize.

From Clark Lindsey:

Rep. Frank Wolf (R-VA) , who is Chairman on the Commerce-Justice-Science subcommittee of the House Appropriations committee, put language into the recent House budget for NASA that requiree NASA to down-select immediately to one primary contractor in the commercial crew program. This would obviously eliminate competition on price and rule out redundancy in case one system is grounded. He has now relented and is willing to allow for “2.5 (two full and one partial) CCiCAP awards”.

As I wrote earlier, the success of Dragon is putting strong political pressure on Congress to support the independent commercial space companies over the NASA-built and very expensive Space Launch System (SLS) that Congress had mandated. Expect to see more elected officials back down in the coming year, with the eventually elimination of SLS from the budget.

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A bank run by an Obama bundler has gotten an Republican-led House committee to exempt that bank from provisions of the Frank-Dodd act, saving the bank $300 million.

5:07 pm

Bipartisan corruption: A bank run by an Obama fund-raiser has gotten an Republican-led House committee to exempt that bank from provisions of the Dodd-Frank act, saving the bank $300 million.

Any law that allows legislators to grant individual waivers isn’t a law at all but a form of extortion: Pay up or you won’t get your exemption. Dodd-Frank, as well as much of all the legislation passed by Congress in the past decade, should be repealed so that everyone gets the exemption.

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An economy built to stall

8:48 pm

“An economy built to stall.”

In his first two years in office, Democrats gave Mr. Obama everything he wanted, save for cap and trade and union card-check, which would have done even more harm to job creation. They passed stimulus, ObamaCare, multiple housing bailouts, Dodd-Frank and more.

Even after Republicans took the House, they gave Mr. Obama the payroll tax holiday he demanded first for 2011 and again for 2012. Far from some new fiscal “austerity,” overall federal spending hasn’t declined. Meanwhile, the Federal Reserve has delivered monetary stimulus after stimulus—QE I, QE II, Operation Twist, and 42 months of near-zero interest rates with the promise of 30 months more.

Mr. Obama has had the freest run of policy of any President since LBJ. So maybe the problem is the policies.

Maybe Milton Friedman was right that “temporary, targeted” tax cuts don’t change the incentives to invest or hire because people aren’t stupid. Maybe each $1 of new federal spending doesn’t produce a “multiplier” of 1.5 times that in added output. Maybe the historic burst of regulation of the last three years has harmed business confidence and job creation. And maybe the uncertainty that comes from helter-skelter fiscal and monetary policy has dampened the animal spirits needed for a durable expansion.

As I said yesterday, though no president or Congress is entirely to blame for the state of the economy, they both can do great harm if they make decisions that interfere with the freedom of the market. And sadly, having the government interfere with the freedom of the market has been Obama’s mantra since the day he took office.

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A U.S. senator has demanded the NIH explain how it could give a $2 million grant to a researcher previously punished for not reporting financial conflicts of interest who is also under investigation by the Department of Justice.

3:01 pm

Corruption in Big Science: A U.S. senator is demanding the NIH explain how it could give a $2 million grant to a researcher previously punished for not reporting financial conflicts of interest who is also under investigation by the Department of Justice.

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Two Democrats joined Republicans yesterday on a Senate committee to block the U.S. military from increasing its use of alternatives fossil fuels.

2:52 pm

Two Democrats joined Republicans yesterday on a Senate committee to block the U.S. military from increasing its use of alternatives fossil fuels.

What stood out to me in this article was the following quote:

As part of this support, in December the Navy agreed to spend $12 million for 450,000 gallons of “advanced biofuels,” which can be blended with petroleum in a 50:50 mixture and burned in conventional engines. The Navy and Air Force have both set a goal of using advanced biofuels for 50% of their fuel use by the end of this decade. But the current $26-a-gallon price tag angered congressional Republicans, who accuse the Obama Administration of using the military to support its green agenda. [emphasis mine]

$26 per gallon for biofuels? I find it astonishing that anyone voted for this program.

Of course the military wants options. And of course we want to reduce our dependence on fossil fuels, if only to reduce the money pouring into the hands of the radical Islamists of the Middle East. But at that price, these alternative fuels are simply not competitive or affordable.

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Cronies ‘R’ us

7:34 pm

“Cronies ‘R’ us,” an illustrative example of why conservatives don’t trust the Republican Party.

As this story points out, the problem in Washington is not merely the fact that the Democrats like to spend other people’s money like water (which they do). It is also because too many established members of the Republican party have been all too willing to join them in this spendthrift behavior.

It is for this reason the tea party movement exists, and why so many established Republicans, like Richard Lugar in Indiana, are getting kicked out of office. The movement isn’t partisan, it is merely focused on making whatever progress it can. Kick out Democrats wherever possible, and do the same for those Republicans who like to be me-too Democrats.

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Using the budget balancing rules Congress imposed on private companies, the federal deficit turns out to be five times greater than the official but fake numbers Congress normally publishes.

10:11 am

The day of reckoning looms: Using the budget balancing rules Congress imposed on private companies, the annual federal deficit turns out to be five times greater than the official but fake numbers Congress normally publishes.

The big difference between the official deficit and standard accounting: Congress exempts itself from including the cost of promised retirement benefits. Yet companies, states and local governments must include retirement commitments in financial statements, as required by federal law and private boards that set accounting rules.

The deficit was $5 trillion last year under those rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books.

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Only 65% of the political class and only 61% of Democrats are aware that federal spending has gone up in the past ten years.

1:58 pm

Pitiful: Only 65% of the political class and only 61% of Democrats are aware that federal spending has gone up in the past ten years.

Interestingly, 85% of the general public knows this basic fact, which might explain why the intellectual elites of our country — from both parties — are continually being blindsided by the rise of the tea party movement and its continued success in elections.

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