However, as Cato points out, the fiscal year starts in October of each year, and the budget for 2009 was signed into law by President Bush. So while I tire of the Obama administration lamenting that they inherited most of their problems, on the deficit front at least, they are right:

Profligate spending by Republicans led to losing majorities in 2006, and the subsequent spending under President Bush and a Democratic Congress proved even worse. So while there’s plenty of blame to go around, the one actor currently on stage that can’t be blamed for the deficit is the Obama administration. Next year, maybe, but not this year.

Cross posted to FrankHagan.com

The departure comes after months of dissatisfaction over Craig’s management of Guantanamo policy and other matters and less than a month after officials said Craig was no longer guiding the effort to close the prison. His departure represents the highest-level White House shake-up to date.

Craig is a respected attorney who became more prominent for his defense work for President Clinton. The Washington Post story credits him with being one of the first Clinton administration insiders to support the campaign of then-Senator Barack Obama. Criag wrote a scathing editorial criticizing candidate Sen. Hillary Clinton’s foreign policy credentials and, as The Washington Post reports, sought a foreign policy position in the new administration.

Craig is credited with influencing President Obama’s hurried executive order promising closure of the Guantanamo detainee facility in Cuba. It was a move he felt had broad support:

I thought there was, in fact, and I may have been wrong, a broad consensus about the importance to our national security objectives to close Guantanamo and how keeping Guantanamo open actually did damage to our national security objectives.

Both major candidates had promised to close Gitmo, so Craig’s assessment is understandable. What the new administration found out is that bold strokes stand out, and actually doing things is harder than talking about them:

White House officials have conceded they will not make the January closure deadline that Craig helped Obama settle on and are at a loss as to where to house a number of hard cases who cannot be transferred to foreign countries or tried in U.S. or military courts.

Cross-posted to FrankHagan.com

Item 1:
The public feud with Fox News ended with the premature departure of Communications Director Anita Dunn and the follow-up announcement that President Obama will grant an interview with Fox News White House correspondent Major Garrett. Evidently he is now considered a “real journalist”. As the Huffington Post gently puts it:

Fox News executive Michael Clemente met recently at the White House with Press Secretary Robert Gibbs, and since then the tensions between the two parties have cooled; senior adviser David Axelrod granted an interview to Garrett last week.

The president’s interview, coupled with Dunn leaving her interim post, are further signals that the administration is ramping down its battle against the cable news outlet.

“Ramping down”? I think the phrase is “full retreat”.

Item 2:
Exit polling showed economic issues to be predominant on voter’s minds in the recent off-year elections. While the Press Secretary emphasized that the elections were about local issues, the administration is reportedly concerned about the “tax and spend” charges being levied against them:

OMB is also reviewing a host of tax changes. The President’s Economic Recovery Advisory Board will submit tax-policy options by Dec. 5, including simplifying the tax code and revamping the corporate tax code.

White House Chief of Staff Rahm Emanuel is pressing for substantial spending cuts to go with any tax increases to try to avoid the “tax and spend” label that has bedeviled Democrats, according to administration and congressional officials.

The current target is $200 billion in TARP funds not allocated that could be used to help reduce the deficit.

Item 3:
Jobs, jobs, jobs. With unemployment numbers proving that the Administration either lied or was mistaken when selling the stimulus bill and promising unemployment below 8%, a new focus comes on the heels of dire economic predictions. Reuters reports on remarks made by Janet Yellen, President of the Federal Reserve Bank of San Francisco:

Addressing the nation’s battered housing market, Yellen said signs of stabilization were an important positive. But she cautioned that the high unemployment rate, currently at a 26-year high of 10.2 percent, raised the threat of a renewed wave of foreclosures that could again pressure home prices.

Today, President Obama announced an upcoming “Jobs Summit”, as reported by ABC White House correspondent Rachael Martin:

The jobs conference will include chief executives from around the country, economists, non-profits and representatives from labor unions. The president said he’s open to hearing “any good idea” to stimulate job growth and incentivize employers to start hiring again.

These initiatives may help counteract the growing dissatisfaction independents have with the Democratic Party. A recent poll shows Democrats losing a generic congressional ballot, a sea change from the two most recent elections. But independents have proven to be hard taskmasters; they want more than just eloquent speeches and catchy sound bites. As Republicans found out in the last two elections, they want results. And this administration has, so far, disappointed them.

Cross-posted to FrankHagan.com

As we head to Election Day 2009, everyone is talking about the Yankees and the Phillies. And a few people are talking about the Mayoral race in NYC, where independent candidate Mike Bloomberg is poised to become the first independent mayor of New York, running on the Independence Party (Column C) and Republican lines. But not Karl Rove. Kind of a big omission, don’t you think? Check out Jon Noltie’s Examiner article. However, other independent and Independence-backed candidates in New Jersey, New York and Virginia are soaking up the ink. See today’s news for independent voters below:

• Tuesday’s Elections and the Democratic Agenda (By KARL ROVE, Wall Street Journal) A year ago, Democrats crowed that Mr. Obama had reshaped the political landscape to their advantage. Voters have lived under Democratic rule for nine months, and many of them, especially independents, don’t like what they’re seeing.
• Strength of independent candidates indicates GOP missing opportunity (Columbus Republican Examiner, by Jon Noltie) In 2 of the 3 most watched electoral races this year, the GOP stands a good chance of losing due to the strength of independent candidates, in addition to not even fielding a candidate in the New York City mayoral race.
• Dividing And Conquering In State Races (John Zogby, Forbes)
• Quinnipiac Sees a Different New Jersey Race Than Rasmussen, PPP (National Review)
• Corzine Up 5 Points In New Jersey Gov Race, Quinnipiac University Poll Finds; Governor Tops Christie On ‘Honesty’ Score (Quinnipiac) Corzine leads 79 – 8 percent among Democratic likely voters, with 10 percent for Daggett. Christie leads 79 – 7 percent among Republicans, with 9 percent for Daggett, and 45 – 30 percent among independent voters, with 20 percent for Daggett.
• NJ Gov Poll: Corzine Takes 5-Point Lead (RealClearPolitics)
• Daggett: Republican urged him to quit gov’s race (The Associated Press, Philadelphia Inquirer)

More news for independent voters at The Hankster

“What is your preference for the outcome of next year’s congressional elections–a Congress controlled by Republicans or a Congress controlled by Democrats?”

Obviously we live in a 2-party system, so that would be the question. But that doesn’t have to be the question, and it ought not be the question. Imagine a poll that asked voters “What is your preference for the outcome of the next year’s congressional elections–a Congress controlled by hacks and partisan shills for the major parties, or people who care about the future of the country?”

Another question in this survey asks:

“When it comes to the partisanship going on in Washington, do you feel this is mainly due to an unwillingness of the Republicans to compromise and find a middle ground to work with the Democrats, or that this is due to an unwillingness of the Democrats to compromise and find a middle ground to work with the Republicans, or do you feel that it is equally the fault of both parties?”

Skipping past the fact that whose fault it is simply doesn’t make a difference, the answers from voters were interesting:  Since February, those who think it’s the Repubs’ fault has gone down from 29% to 22%; those who believe the Dems are at fault has stayed practically even going from 14% to 15% in that time span; and those who think it’s the fault of both parties? You guessed it — starting with a majority of 56% in Feb., it’s now 61%. Voters identifying as Strictly Independent, or Independent/ leaning Democrat or Republican made up 43% of the survey respondents.

Here are my picks for the week’s news for indies:

• Poll Reflects Afghan War Doubts-Obama Slips on Foreign Policy, but Gains on Health-Care and Economic Fronts (By JONATHAN WEISMAN, Wall Street Journal) As the 2010 election cycle heats up, independent voters now favor Republican control of Congress by four percentage points.
• NBC/WSJ: OBAMA HEALTH #S INCH UP (From NBC’s Mark Murray)
• Job One-The only way Obama can pull his presidency back from the brink. (John B. Judis, The New Republic)
• ANALYSIS-ACORN scandal not seen rubbing off on Obama (Reuters)
• The Most Important Number in Politics Today (Chris Cillizza, Washington Post/The Fix)
• Obama’s Leadership Qualities Stand Out to Americans (by Jeffrey M. Jones, Gallup) Democrats’ views have barely changed (90% in April vs. 88% today), while Republicans’ (38% vs. 21%) and independents’ (63% vs. 50%) ratings are down more than 10 points each.
• Obama Policies Turn Off Independents (By Paul Bedard, Washington Whispers/US News & World Report)
• Regulating King Kong and Crackpot Theory in Talk/Talk with Fred Newman and Jackie Salit, at independentvoting.org. Also check out the letter that independentvoting has sent to Obama asking him to appoint independents to the FEC.

Read more news for independents at The Hankster

If you want to call it “fickle” to leave the two-party system behind in favor creating a new political culture, call me fickle!

• 2010: Fight for fickle kids (By: Eamon Javers, Politico) Stanford University political science professor Morris Fiorina is convinced that both political parties haven’t yet grasped the scale of the change that’s happening in society. Republicans, he said, made the mistake of assuming that the divisions they exploited in the 2000-2004 elections were much deeper and more durable than they actually were — and were shocked by vote swings in 2006 and 2008 that would have seemed inconceivable in 2004. Not to mention, he said, “the emergence of Obama out of nowhere.”

PENNSYLVANIA

Independent-turned-Democrat Joe Sestak plans to challenge veteran Republican-turned Democrat Sen. Arlen Specter in the 2010 Pennsylvania Democratic primary.

• Senate candidates from opposite sides use same strategy against Specter (By Reid Wilson, The Hill) Whether it is the outlier result of a single poll or the harbinger of inroads to come, Toomey actually leads Specter by a 46-42 percent margin among independent voters in a Quinnipiac University survey. The poll was conducted July 14-19.
• Sestak ready to announce he’ll take on Specter (By Thomas Fitzgerald, Philadelphia Inquirer)
• Sestak Fires Back: Dem. Specter Makes Republican Swift Boat Attacks On Dem. Military Veterans (By Brian Beutler, TPM, July 9, 2009)

NEW JERSEY

Gov race: Dem Corzine vs. Repub Christie vs. independent Daggett

• NJ Gov: Internal (D) Poll Shows Corzine Down 7 (RealClearPolitics)
• Christie maintains lead over Corzine in poll (By Cynthia Burton, Philadelphia Inquirer) independent candidate Chris Daggett took 4 percent

NEW YORK

Special elections in NY are nonpartisan and therefore allow everyone to vote regardless of registration. They favor insurgents and independent candidates.

Goo-Goos To Paterson: Don’t Call 38th AD Special Election (Liz Benjamin, Daily News/Daily Politics)

For more independent news, see The Hankster, where the independents are…

Continued look at who independent voters are/are not and Obama’s poll numbers…

• A reminder: Most ‘independent’ voters aren’t (LA Times/Top of the Ticket)
• Sick and Tired of Republicans and Democrats? New Parties Say They Offer Alternatives (By James King, Phoenix News Times)
• Pa.’s Sestak plans Tuesday announcement (USA Today)
• Poll: Pennsylvania ranks 20th most Democratic state in the nation (Erik Westervelt, Phildadelphia Opinion Polls Examiner)
• Political Party Affiliation: 30 States Blue, 4 Red in ‘09 So Far (by Jeffrey M. Jones, Gallup)
• Zogby/O’Leary Poll Reveals Majority of Voters Will Oppose Senators Who Vote to Confirm an Anti-Second Amendment Supreme Court Nominee (Press Release)  NOTE: Included here because the Zogby/O’Leary poll purports to speak for independents…
• Obama’s Ratings Slide Across the Board – The Economy, Health Care Reform and Gates Grease the Skids (Pew Research)

SCHWARZENEGGER/OPEN PRIMARIES

Calif Gov Arnold Schwarzenegger is determined to leave a legacy of reform — particularly open primaries, which would give more power to voters

• Schwarzenegger is unpopular but undaunted (George Skelton, Capitol Journal, LA Times)
• A State of Confusion editorial: State needs fixes to avoid a repeat (Sac Bee) As for the Legislature itself, an open primary in place of the partisan nominating system we have now might help elect more moderate lawmakers and lead to a more consensus-oriented body.

For more independent news, see The Hankster, where the independents are.

While you could point out any number of mistakes these organizations have made in the last few months, perhaps the most glaring is their belief that they could use the momentum from the 2008 election to push their dream bills through to passage. Their sometimes misplaced tactics haven’t helped their cause either, pulling silly publicity stunts and waging a terribly mismanaged media push. The real meat of it was their misconstrued overall strategy of shoving this legislation through, over the opposition of nearly all republicans and a good chunk of moderate Democrats.

This was just plain foolish. They had to know that they would have a hard time getting moderate Dems to vote their way on the Employee Free Choice Act (EFCA, or card check if you prefer). They couldn’t have been so blind as to think the Blue Dogs would just roll over on their health care plan, with it costing so much… right?

Some polling has shown a bit of a shift, but numbers have been relatively steady on the issue of the secret ballot being favored over card check, and how wary the public is when it comes to expansion of government into health care. With the debt rocketing into the sky at an historic pace, and promised cost savings being debunked by the CBO, rather than work with the swing votes in the Senate to find a compromise these groups, and liberal organizations like them, have chosen perhaps the most ineffective strategy they could take.

Demonize the moderates.

There is a reason why politicians tone down the partisan their rhetoric after winning primaries, and why many are now saying that 2010 might not be so bad for Republicans after all. Attacking representatives who speak for those of us who worry about liberal overreach and a need for fiscal sanity helps nobody but the Republican party. Democrats may have the majority, and 60 votes in the Senate, but liberals do not… and this will not change any time soon.

Realizing this and working with the center, rather than attacking us, will allow these organizations to make progress on their legislative goals, keep their solid majority and stem the tide of independents that are now beginning to peel their support off. The silver lining of all of this, from my more centrist perspective, is this is leading to even more people leaving both parties. With over 40% of the population now identifying as independents, it is just a matter of time before something happens that turns the independent groundswell into a movement.

Past the constant calls for saving money by eliminating wasteful spending, which never seem to materialize into actual legislation, we need to find new forms of income to pay for this bill. They seem to be failing at convincing enough senators to support taxing benefits and the more affluent, so what else is left?

For the most part, we pay for our governmental services through income taxes (both individual and corporate), property taxes and consumption taxes. Property taxes are used for other things and rightfully shouldn’t be on the table here. The two proposals that were trotted out for discussion by the Democratic leadership were both taxes on types of income. What remains are consumption taxes.

In a way, consumption taxes are the most fair. For instance it makes perfect sense to tax gasoline and tires to pay for roads, as those driving on those roads need those things to do so. So doesn’t it make sense to tax those behaviors that create high health care costs? The American people seem to think so.

Kaiser Family Foundation poll

A poll by the Kaiser Family Foundation, from back in April, found that reforming health care is one of the public’s highest priorities, that a majority of Democrats and Independents believe that we need reform now and that a majority support taxing unhealthy behaviors as an acceptable way to pay for some of these reforms. When asked it they would support raising taxes on “items that are thought to be unhealthy, such as soda, alcohol, junk food and cigarettes,” 61% approved (39% strongly favoring, with 22% somewhat favoring the idea). I’m a huge fan of proposals that kill two (or more) birds with one stone, and I think this is a textbook example of such.

To fund a health care program, it makes much more sense to tax behaviors that lead to health problems than it does to tax income in general. By doing so we can, in one fell swoop, put more of the costs of the system in the hands of those who are causing the most problems, lower the consumption of these products AND help pay for universal health care. We already have taxes on cigarettes, alcohol and items deemed luxuries like jewelry, hotel stays and amusement parks. So why not extend similar taxes to the most unhealthy ‘food’ items in the market? (I put food in quotes because one could argue that high fat and sugar content items like pop, potato chips and many fast food items can hardly be described as food)

First on the cutting block is alcohol, with 68% of respondents strongly or somewhat favoring raising taxes on it to help pay for health care reform. Smoking is more demonized in our country, but alcohol related health costs actually outweigh those related to smoking. The Marin Institute lists several alcohol related health care costs, among them $175.9 billion on alcohol related problems, also saying that they bring about “$184.6 billion dollars per year in health care, business and criminal justice costs, and cause more than 100,000 deaths.” This being the case, I see it as nothing but reasonable to levy a higher tax on alcohol, possibly in relation to which forms of it result in the worst outcomes, that is equal to the cost to society it incurs.

Still with a few hundred billion dollars to go, we come to tobacco. I was a bit surprised that a higher cigarette tax was supported by fewer than the increased alcohol tax, but this may be because tobacco products are already taxed at a high rate. Florida alone loses $20 billion dollars when you compare the taxes it collects to the money it pays out, amounting to nearly $7,000 per smoker. A study released by the CDC in 2002 showed that “For each of the approximately 22 billion packs sold in the U.S. in 1999, $3.45 was spent on medical care attributable to smoking, and $3.73 in productivity losses were incurred, for a total cost of $7.18 per pack.” These numbers are sure to have risen since then, and with somewhere in the neighborhood of 30 billion packs of cigarettes sold in the US last year, it seems more than fair to tack on at least another few dollars per pack.

Whether or not this fills the gap entirely, we also should look at taxing the most unhealthy food items. A study at University of Victoria (British Colombia) found that all income groups would benefit, although more so near the top of the economic spectrum, from a tax on junk foods that sent money towards health care programs. I would suggest that this disparity would be less pronounced in the US, where many people near the bottom of the economic spectrum have much more to gain from such an arrangement, given that it will help pay for health insurance that many of them currently do not have.

Put all of these together, and you might piece together enough to get over the hump. At the very least we could make it easier to pass one of the income tax ideas by lowering the amounts they’d have to raise through it.

One might argue that this would cause people to consume less of these products, thereby reducing the income from the levies. My response would be that we should then increase the taxes to keep up with the costs. This would hopefully create a cycle where more people would consume less, making the purchase of such products even more expensive, driving more out and lowering costs to treat those people over the long run. Herein lies the killing two birds with one stone situation.

One might also argue that this is a regressive tax. In effect it will be that way, at least at first. It is the lower end of the spectrum that spends a larger amount of their overall income on food. They also tend to eat less healthy foods. However, nobody forces them to choose to purchase these particular food items. Nobody should force them to quit, but if they want to continue to lead an unhealthy lifestyle, the rest of society should not be forced to subsidize it.

If people want to smoke, drink or eat themselves to death, then they can make a down payment on the hundreds of thousands of dollars the government will pay to take care of many of them during the last months of their lives. If we can save some of them from that fate by enacting the proposals mentioned above, thats even better.

Universal Health Care... How?

The Obama administration has managed to collect some concessions from hospital groups and drug companies, to the tune of over $200 billion in savings over ten years. This is nothing to sneeze at, but it still leaves the lion’s share of the proposed legislation searching for funding. Setting a requirement for employers to pay a fee to help cover uninsured employees takes another bite out, leaving hundreds of billions still to be found.

The Democratic leadership has brought up two major ideas fill that gap:

1. taxing the medical benefits of higher earners
2. a surtax on those who make more than $280,000 a year.

After some early indications otherwise, the proposal to tax medical benefits seems to be dead in the water. Support in the Senate dissolved when several polls put the opposition to such an idea among the public at around 59%. Unions, many of whom have negotiated higher benefits in lieu of higher pay over the last few years, were especially vocal in their opposition, which assured the proposal would lose enough support among democrats to block its passage.

It’s unclear whether the surtax proposal has enough support to make it through the senate either. Polls show people’s potential opposition of higher taxes to fund better coverage has been mixed. However, about 60% of those polled are for taxing those making over $280,000 a year to fund reform, lending weight to the surtax proposal. Charlie Rangel, who proposed the surtax plan, is expected to introduce the legislation Monday, but comments by several influential Senate Democrats suggest its chances of passage may be slim.

Dick Durbin, the second-ranking Democrat in the Senate (and Obama’s Blackberry buddy), has come out saying that the proposal is unlikely to pass. Kent Conrad, prominent member of a moderate group of Democratic Senators that would have to support any proposal entirely to block a filibuster, has said that he thinks the senate is heading in a direction other than controversial ideas like these two proposals. If these two senators are correct, and no other major solutions are being offered, then what options are left?

Passing a reform bill of this magnitude was not expected to be a walk in the park. Reforming a massive and labyrinthine system – with interests holding considerable clout and an opposition bent on stopping a public option – would be difficult even if the Democrats had a few more seats in the Senate. So far, Obama has been fairly hands off in his approach to working with congressional leaders on legislation. He seems to favor dealing out broad strokes of what he’d like to see in a bill that he would sign. This time he’s going to have to put more skin in the game and put some of that political capital to the test. If he can’t push either of these two funding proposals pushed through the Senate, he will have to explore other options.

Read on about some of those options in my next post, How TO pay for Health Care Reform.

We’ve been hearing about cellulosic ethanol for several years now, generally with the caveat that were at least a few years, and a few scientific breakthroughs, away from it coming to market and helping wean us from foreign oil. Unlike corn, which breaks down into the sugars necessary to be processed into ethanol relatively easily, cellulose is a hardy material that takes time and energy to break down. Its upside is that there happens to be more cellulose present than any other organic molecule on the planet. This is why millions upon millions of dollars has been poured into cellulosic ethanol research, genetically modifying naturally occurring enzymes to break it down faster and looking for ways to bring the price per gallon down closer to the price of gasoline.

Unlike corn, which takes land out of food production, is inefficient as far as how much energy it takes to produce and is a high maintenance crop, finding raw material for a cellulosic plant is easy. Wood chips from sawmills, the kudzu scourge spreading through the hot and humid Southeast, agricultural waste and even up to 80 percent of what ends up in our landfills could be used to make cellulosic ethanol.  Thankfully, the millions of dollars in research and development have begun to bear fruit.

A gas station near Ottawa is the first in the world to begin selling a cellulosic blend, called CE-10, to the public. Iogen, the company behind the demonstration plant that produced the fuel, plans to build its first full scale cellulosic ethanol plant in Saskatchewan. It has reached an agreement with the local government and Royal Dutch Shell to convert an old Mill site to their purposes, with the government even agreeing to purchase any green energy produced at the site. The running demonstration plant only has the capacity to produce about 3 million liters of ethanol each year, using wheat straw agricultural waste, while the new plant will be able to pump out about 75 million liters. It will make use of a more diverse feed stock, including agricultural waste from other crops, grasses native to nearby areas and even wood chips from area mills.

The march of progress continues, with a number of large companies making big investments into these technologies. Last year GM purchased a large share of Coskata, a big player in the emerging cellulosic ethanol industry, who claims to have developed a process that simplefies the complex and costly process of breaking down cellulose and brings the cost of production down to being competitive with gasoline. There are as many as two dozen companies with plans to build plants similar to Iogen’s, but the economic downturn is effecting their ability to finance these projects. Coskata is hoping to get some stimulus money, in the form of loan guarantees, to help finance its plant, with an estimated production of 50-100 million gallons a year.

As President Obama often says, if we intend to be a leader in the green energy industry of tomorrow, we need to move boldly in that direction today. Now is not the time to let companies who wish to lead us in there falter because of financing problems. Some are talking about a new stimulus bill, which most people reasonably see as a terrible idea, that would focus on these kinds of projects and job creation. The first should have done so, and I have little confidence that a new one would make it through congress without being similarly unfocused and pork laden.

We don’t get too many of these chances, where we can kill three birds with one stone. Job creation, independence from foreign oil and environmental progress can all be had with some smart funding priorities. Lets hope the administration recognizes this in time.

This is Mike Fritz and David Murdock from ANP.

Senator Lindsey Graham was a passionate critic of the Bush Justice attorneys during this past summer’s Armed Services Committee hearings on interrogation.

Lately, however, Graham seems to have had second thoughts on the matter. At a recent Judiciary subcommittee hearing investigating the torture memos, Graham mounted a feisty defense of Jay Bybee, John Yoo and the lawyers who provided legal cover for detainee abuse.

This performance sent producer Mike Fritz back to the ANP archives to confirm that this was indeed the same Lindsey Graham we remembered from the summer, and sure enough, it was. As this video reveals, same guy – different message.

Click to view the whole story at Huffington Post.

Goldberg also makes this odd statement:

A justly convicted murderer should be punished regardless of his race. A justly convicted drug dealer should be punished, regardless of his race as well. If we’re punishing a disproportionately high number of blacks, that’s a sign we should crack down on more guilty whites, not give up on punishing crimes.

This is particularly puzzling because Goldberg has argued that anti-statism is at the core of conservatism and is also why libertarians should continue to coalition with conservatives. Obviously, increasing drug prosecutions is not only inconsistent with any conception of limited government, it’s also an expansion of the size of government. And not an insignicant expansion either, given that this can definitionally only be achieved by pursuing people with enough resources to put up a tough fight against drug prosecutions (a fact that at least partly explains the socioeconomic discrepancies in such prosecutions in the first place).

Goldberg’s statement does indirectly suggest one point worth exploring, though – that human liberty is increased when laws are enforced more uniformly; unfortunately, he takes this point to be a justification for the expansion of drug prosecutions.

Much has been written of late about the difference between small and limited government – specifically, small government refers only to the fiscal “size” of the government, whereas limited government refers to the government’s actual powers. If you accept that the State must exist, as even most libertarians do, then one must have a desire that the Stated do well that which it is authorized to do. If the State does its job poorly, then it will actually have a more negative impact on individual liberty than if it does its job well, because at that point enforcement of the laws becomes arbitrary and based on one’s ability to curry favor with the State in some other non-germane arena.

If, on the other hand, the State does its job well, then people may act in reliance upon the law being enforced equally without regards to other issues. So there may be a marginal decrease in liberty due to the existence of the law in the first place, but this is mitigated by the fact that uniform enforcement ensures that people may act in reliance upon the law and without having to curry favor with the State in some other arena. This means less State corruption, less connection between wealth and power, and less fear of interference from the State more generally.

The trouble is that very often uniform enforcement is simply not possible due to the State’s limited resources. Put another way, in the words of the inestimable Wirkman Virkkala, “regulation is not scalable.”

In the case of the War on Drugs, this problem is particularly apparent. For any given drug, there are going to be potentially millions of users spread out over a vast country. The only way to have uniform enforcement of the drug laws in such a situation is to have an incomprehensibly large budget far bigger than the already-incomprehensibly large Drug War budget we have. Other programs, some of which may or may not be enforced in a relatively uniform fashion will need to be scaled back (and thus enforced more arbitrarily). Short of that, given the nature of prohibitions on the possession of banned personal items, the only way to truly enforce the law uniformly would be to turn our neighbors and friends into de facto secret police.

Still, under some circumstances, I suppose it’s possible to enforce such prohibitions in a more or less uniform fashion without creating a de facto secret police force – whatever Singapore’s flaws (and it has many), drug use is not something that flourishes there. Part of that, though, is that Singapore is a tiny nation geographically, and another part of it is that it spends very little on many other types of restrictions, such as economic regulation.

Which brings me to my final point – even regulations that are not outright prohibitions can be uniformly enforced only if they govern a sufficiently small number of actors or if the enforcing agency has the very substantial amount of resources necessary to enforce the regulations uniformly over a large number of actors. Again, they are not scalable. If the regulations are to apply to more actors than the agency has the resources to oversee, then the only solution an agency may follow will be to make the regulations so restrictive as to ensure the reduction of the number of actors over whom they have jurisdiction. In other words, regulatory capture doesn’t just benefit the capturing business – it also benefits the captured regulator.

There is, I think, a solution to this problem: terminate any set of laws or regulations that cannot be uniformly enforced without an unrealistic budgetary expansion, and fully fund those laws or regulations that can be enforced in a relatively uniform fashion. Unfortunately, this is impossible in a two-party system where the Executive is increasingly viewed by both supporters and detractors as omnipotent and where few are willing to admit the unrealistic nature of their pet programs.

Cross-posted at the League of Ordinary Gentlemen.

This is Danielle Ivory, reporting from the American News Project and Alternet.

Back in February, in the House Financial Service Committee, when asked a question about the value of Citigroup’s assets, CEO Vikram Pandit provided a less-than-clear response: “It’s an extraordinarily difficult question.”

Click the video below to WATCH the exchange between Rep. Louis Gutierrez (D-IL) and Vikram Pandit.

Rob Weissman, director of the corporate watchdog group, Essential Action, and author of a new report called Sold Out: How Wall Street and Washington Betrayed America, said that, in addition to what Pandit said, there’s an additional factor that could fog the test results: off-the-book assets.

“If you don’t include the off-balance sheet assets in the stress test, then it’s not a legitimate stress test,” Weissman said. “It’s pretty plain that the off-balance-sheet operations are a central part of the story of why we don’t know what the banks own.” The Treasury Department declined to comment on whether they would take off-book-assets into account when running the stress tests.

Weissman says that recipients of bailout money, like Citigroup, Bank of America and JP Morgan, have been engaging in “fanciful accounting” of what they owe and what they own by relocating of their less-than-healthy assets off the books, in shadow corporations. Rep. Brad Sherman has described the process as, “apples on one balance sheet and oranges on another.”

According to RGE Monitor, off-balance-sheet operations have skyrocketed over the last 15 years. From 1992 to 2007, on-balance-sheet assets grew by 200 percent, while off-balance-sheet assets grew by 1,518 percent. In 2007, it was estimated that there was 15.9 times more money parked in off-balance-sheet operations than in on-the-book operations. Not all off-book assets are toxic. Some financial institutions might park assets off their books if they are planning, for instance, to sell them. However, in rough economic times, off-balance sheet accounting allows banks to veil their losses from investors, regulators, and even insiders.

“This turns out to be a really important benefit [for a bank] if it happens to be insolvent,” Weissman added. “And many believe that if you total Citigroup’s assets and liabilities, it is insolvent.”

As of July, Citigroup appeared to have the most off-book assets — an estimated $1.1 trillion. But they aren’t alone. As of July 2008, JP Morgan Chase & Co. had more than $400 billion off their books. Bank of America had $48.2 billion off the books before it bought Merrill Lynch. “If you start adding up all the potential exposures, it’s a huge number,” Sam Golden, former ombudsman for the U.S. Office of the Comptroller of the Currency, told Bloomberg. “The banks will say that it was disclosed. Investors are saying, ‘Yeah, but it was cryptic.’”

Disclosure rules for off-balance sheet operations are notably less strict than those for assets on the books. Neri Bukspan, chief accountant for Standard & Poor’s told Bloomberg, “A lot of information tends to disappear.”

The use of the off-balance-sheet assets was a core part of the Enron scandal, where they were able to wrap debt inside of debt, using obscure corporations, so no one could track what they owed and what they owned. After the Sarbanes-Oxley Act of 2002 was set in place, there were efforts to address the problems with off-book assets. But after heavy lobbying by two main trade groups, the Securities Industry and Financial Markets Association and the American Securitization Forum, banks were given special exemptions.

In September of 2008 as the financial crisis was coming into full view, the Senate Baking, Housing, and Urban Affairs Committee held a hearing, discussing off-balance sheet operations. Senator Jack Reed recalled Enron: “This phenomenon of moving assets off the balance sheets is eerily familiar. We recall back in the days of Enron that its schemes to manufacture false profits included special purpose entities that conducted transactions off-balance sheet. The goal was to avoid financial reporting. While no one is necessarily suggesting scandals of the Enron kind, we cannot fail to admit the irony. We are dealing with a similar problem yet again, only six years later.”

George P. Miller, Executive Director of the American Securitization Forum, said that moving assets off-book back on to the books would cause dangerous swelling of balance sheets. He added, “There are many other steps that the industry can and should undertake to promote broader and better transparency about risk exposures in these vehicles, whether they are on or off-balance sheet.”

But Donald Young, former member of the Financial Accounting Standards Board countered, “We just had an investment bank [Lehman Brothers] go bankrupt with a fair value balance sheet that showed it had plenty of assets and liabilities. And it almost seems like financial reporting is out of control and not trusted and not believed in. And I think what we do here has got to establish transparency. If the transparency is such that we’re going to bring out some bad news that wasn’t there before, that’s a risk. But I think the benefits of reestablishing confidence in the markets will overwhelm that.”

The Financial Accounting Standards Board (FASB) are revising the rules so some off-book assets will have to be reported on the books. However, the changes won’t be effective until January 2010 at the earliest. In March at a House Financial Services Subcommittee hearing, Rep. Sherman complained about this lag. He told the chairman of the FASB, Bob Herz, “If you guys can’t act quickly and logically, perhaps the regulatory accountants need to act and depart from what is a somewhat illogical and certainly slow process that you’ve got.”

In the meantime, in a recent letter to his employees, Pandit has said Citigroup is having its best quarter since 2007 and the bank had conducted its own internal stress tests with positive results. But Weissman says something doesn’t add up. “Either they’ve done a lot of due diligence in a short amount of time that they hadn’t done before, or the stories are incompatible.”

Crossposted at Alternet.

In the wake of the Justice Department’s decision to drop charges against former Alaska Senator Ted Stevens, Alaska’s Governor is joining those making a rather absurd call:

Gov. Sarah Palin (R-Alaska) called on Sen. Mark Begich (D-Alaska ) Thursday to step down from his seat and run in a special election in the wake of the Justice Department’s decision to drop corruption charges against former Sen. Ted Stevens (R-Alaska). Begich narrowly defeated Stevens in 2008, a contest overshadowed by Stevens’ October conviction.

Palin’s call came after a reporter at the Fairbanks News Miner emailed her a copy of a statement by Alaska Republican Party Chairman Randy Ruedrich calling for Begich to step down.

Asked for her response, Palin simply wrote back: “I absolutely agree.”

When the reporter wrote back to confirm that Palin meant she’d like to see Begich resign in order to hold a special election, the governor responded: “Yes.”

In an email to POLITICO, Palin spokeswoman Meg Stapleton confirmed the governor’s position. “She absolutely agrees that there should be a special election,” Stapleton wrote. “Stepping down to hold the special election would be the right thing to do.”

Over at The Next Right, Jon Henke says quite succinctly exactly what I thought when I first heard this last night:

A lot of people wonder who the next leaders of the Republican Party should be. I don’t know. But you know who it shouldn’t be? Anybody who thinks the current elected Senator from Alaska should resign so that the corrupt former Senator Ted Stevens can be brought back to the Senate.

Seriously people, do you really want to see the guy behind the Bridge To Nowhere and one of the Senate’s Kings of Pork back in the Senate ?

Stevens symbolizes much of what was, and apparently still is, wrong with the Republican Party and the fact that Palin seems open to the idea that he should be given another bite at the apple just confirms what I’ve thought about her since September.

James Joyner, meanwhile, addresses the “fairness” issue that some are raising:

The Attorney General dropped the case against Stevens prior to sentencing because of prosecutorial misconduct, not because of evidence exonerating Stevens.

Beyond that, it’s not uncommon for narrow elections to be decided based on dubious knowledge on the part of the voters. Candidates are often smeared with unfounded charges by their opponents and occasionally even charged with actual crimes for which they are subsequently exonerated. Them’s unfortunately the breaks. There are no do-overs.

Just ask Gary Condit.

C/P: Below The Beltway

The hyperbolic rage against the AIG bonuses has finally transformed itself into legislation:

While American International Group Inc.’s chief executive says the firm could recover millions in bonuses via voluntary means, that’s not slowing a legislative effort to recoup the money and shift the incentive-based pay structure traditionally used by financial institutions.

The House is scheduled to act Thursday on legislation (HR 1586) that would impose a 90 percent tax on bonuses given to highly paid employees not only of AIG, but of all recipients of more than $5 billion in federal bailout funds, a group expected to include about a dozen financial institutions, according to Ways and Means Chairman Charles B. Rangel , D-N.Y. Bank of America Corp., Wells Fargo & Co. and Citigroup Inc. would likely be among the affected companies.

“I expect to see an overwhelming vote,” House Majority Leader Steny H. Hoyer , D-Md., told reporters Wednesday afternoon.

Of course you will. The question is whether Congress even has the authority to do pass legislation of this type. Several pundits — here and here for example — have argued that the move would violated several provisions of the Constitution, but the sad truth of the matter is that this Congressional mugging is, most likely, Constitutional.

Bill of Attainder and Ex Post Facto Arguments

Article I, Section 9 of the Constitution includes the following limitation on Congressional power:

No Bill of Attainder or ex post facto Law shall be passed.

A bill of attainder is generally defined as follows:

“These clauses of the Constitution are not of the broad, general nature of the Due Process Clause, but refer to rather precise legal terms which had a meaning under English law at the time the Constitution was adopted. A bill of attainder was a legislative act that singled out one or more persons and imposed punishment on them, without benefit of trial. Such actions were regarded as odious by the framers of the Constitution because it was the traditional role of a court, judging an individual case, to impose punishment.” William H. Rehnquist, The Supreme Court, page 166.

Since the legislation being considered by Congress would apply to anyone who receives a bonus from any entity that received more than $ 5 billion in TARP funds and isn’t just limited to recipients of bonuses from AIG, it is likely general enough to get past any question that it is an unconstitutional Bill of Attainder.

As for the ex post facto argument, the Supreme Court decided way back in 1798 that this provision only applies to criminal laws, not civil laws such as a tax measure, so there would be no bar to the bonus tax even though it is theoretically retroactive.

Other Constitutional Arguments

As the Wall Street Journal notes, the remaining arguments against the bonus tax plan are even weaker. The Contract Clause of Article I, Section 10 only applies to the states; the Takings Clause of the 5th Amendment has never been interpreted to apply to tax laws; and, the Due Process Clause of the 5th Amendment only applies to procedural due process, which would clearly exist in this case.

Finally, a post at Wizbang has also raised an Equal Protection objection to the planned tax:

[W]e might as well mention the concept of Equal Protection, since a law taxing only AIG employees would clearly violate it.

As I noted above, the proposed legislation does not only apply to AIG employees or bonus recipients. Therefore, it’s unlikely that they could make a successful claim that they were being singled out as a class by the law. Even if they were, it’s unlikely that they would be considered a suspect class for equal protection purposes, meaning that the law would only have to pass the fairly liberal rational basis test. Most importantly, though, it’s fairly clear from the language of the Fourteenth Amendment that the Equal Protection Clause only applies to the states:

1. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

So, as far as the Constitution goes at least, Congress is, sadly, within it’s authority to tax away to oblivion the AIG bonuses.

Update: Conor Clarke offers this from Harvard Law Professor Laurence Tribe:

I’m in the process of taking a closer look at this issue at the request of several others both in and out of government, but I can tell you this much on the basis of what I know from my past research and experience: It would not be terribly difficult to structure a tax, even one that approached a rate of 100%, levied on some or all of the bonuses already handed out (or to be handed out in the future) by AIG and other recipients of federal bailout funds so that the tax would survive bill of attainder clause challenge.

Such a tax would presumably be leveled on the basis of some criterion sufficiently general to avoid classification as a measure targeting solely a closed class of identified and named individuals. The fact that the individuals subject to the tax in its retroactive application would in principle be readily identifiable would not suffice to doom the tax either from a bill of attainder perspective or from a due process perspective. Moreover, the fact that the aim of such a tax would be manifestly regulatory and fiscal rather than punitive and condemnatory, and that the tax would be part of a measure that would be prospective as well as retroactive in its operation, would serve to blunt the force of any bill of attainder challenge. Finally, such a tax would be devoid of the sting of political retribution and would not partake of the classic “trial by legislature” that the attainder ban was designed to avoid.

All things considered, I believe it very likely that Congress could design a fully constitutional means of clawing back into the federal treasury all amounts paid (or to be paid in the future) in the form of retention bonuses from federal funds disbursed either by the Federal Reserve Board pursuant to legislative authorization tracing to the 1930s or by the Treasury pursuant to the most recently enacted federal bailout and stimulus measures.

It seems to me that the bill passed by the House today fits Tribe’s criteria quite well and that, in the end, any Constitutional objections will end up being entirely academic in nature.

H/T: James Joyner

[A]re there some downsides to conservative talk radio? Taking the conservative project as a whole—limited government, fiscal prudence, equality under law, personal liberty, patriotism, realism abroad—has talk radio helped or hurt? All those good things are plainly off the table for the next four years at least, a prospect that conservatives can only view with anguish. Did the Limbaughs, Hannitys, Savages, and Ingrahams lead us to this sorry state of affairs?

They surely did. At the very least, by yoking themselves to the clueless George W. Bush and his free-spending administration, they helped create the great debt bubble that has now burst so spectacularly. The big names, too, were all uncritical of the decade-long (at least) efforts to “build democracy” in no-account nations with politically primitive populations. Sean Hannity called the Iraq War a “massive success,” and in January 2008 deemed the U.S. economy “phenomenal.”

And if you dared to be one of those criticizing the Bush Administration’s domestic policy, or question it’s foreign policy, then watch out. Even if you were a Republican you were still a traitor, a RINO, un-American. For eight long years, with only a few minor deviations such as the nonsense over the Dubai Ports Deal or Bush’s inexplicably stupid selection of Harriet Meirs for the Supreme Court, conservative talk radio carried the water for an Administration and a Republican Party that was anything but conservative.

During the 2008 Election, you heard more from Rush, Sean, and the rest of the gang about the race between Hillary Clinton and Barack Obama than about the Republicans. There was precious little discussion about Mike Huckabee’s love for taxes, Mitt Romney’s flip-flops, or John McCain’s, well, John McCain-ness. And voices in the party for limited government and rational foreign policy, like Ron Paul, they either weren’t talked about at all or they were ridiculed.

But it’s not just their slavish loyalty to whatever Republican happens to be in power that bothers Derbyshire about the talk radio crowd:

Much as their blind loyalty discredited the Right, perhaps the worst effect of Limbaugh et al. has been their draining away of political energy from what might have been a much more worthwhile project: the fostering of a middlebrow conservatism. There is nothing wrong with lowbrow conservatism. It’s energizing and fun. What’s wrong is the impression fixed in the minds of too many Americans that conservatism is always lowbrow, an impression our enemies gleefully reinforce when the opportunity arises. Thus a liberal like E.J. Dionne can write, “The cause of Edmund Burke, Leo Strauss, Robert Nisbet and William F. Buckley Jr. is now in the hands of Rush Limbaugh, Sean Hannity. … Reason has been overwhelmed by propaganda, ideas by slogans.” Talk radio has contributed mightily to this development.

(…)

Why engage an opponent when an epithet is in easy reach? Some are crude: rather than debating Jimmy Carter’s views on Mideast peace, Michael Savage dismisses him as a “war criminal.” Others are juvenile: Mark Levin blasts the Washington Compost and New York Slimes.

You could see this triumph of low-browism in full force during the 2008 General Election from the adulation given to a totally unknown Governor who virtually celebrated anti-intellectualism, to the attention given an unlicensed plumber from Ohio who managed to get himself YouTube’d repeating a GOP talking point, to the unstated assumptions that many had about Barack Obama that just weren’t true.

And you could see just how well that went over on Election Night.

Joe Gandelman makes this excellent point about the damage that this has done to the right, and the GOP:

Just talk to a high school or college student who is NOT a member of the Democratic party or Republican party and get his/her reaction to hearing a typical conservative talk show that sounds like three hours of rip and read RNC emails while raging against anyone with a “D” in front of their party affiliation. Most young people listening to sputtering and name-calling partisans on the air consider them lame — and many of these young people are conservatives or liberals.

(…)

The question is whether conservative talk radio will continue to grow as a dominant high profile voice of Republicans — one that decidedly turns off many independent, moderate, centrist, conservative Democrats, moderate Republicans, and young people who are not “damaged goods” baby boomers (like me) and makes them think this is what the Republican party is and stands for — or whether it can go back to being one tool in the GOPs’ get-out-vote arsenal.

In the 1970s the voice of conservatism on the air was Firing Line. Today it’s Rush, Sean, Laura, Mark, and Michael. If anyone doesn’t recognize that’s a step backward, it’s only because they’ve become used to associating the right with the latter rather than the former.

Rush Limbaugh may be the “leader of the opposition,” but he doesn’t have to be, and he shouldn’t be.

Cross posted from Below The Beltway.