Thursday, April 29, 2010

What the Tea Party Movement is Really About.

Most commenters dismiss the TP as a nuisance deserving only to be ignored. Some go a little farther. David Brooks fears the TP because, as he notes, some TPers are independents, not Republicans, and their few percentage points are enough to swing lots of elections. Noam Chomsky fears the TP because he sees in it the germ of an American Nazi party that is only waiting for its charismatic Hitler to emerge and destroy the world with military power that, unlike Germany’s in 1939, is unchallengeable.

Here’s what the TP itself really fears, in an inchoate way that for most of its members doesn’t rise to the level of clear understanding, but is still intuitively very powerful: the US is embracing central planning as a governing theory, as fast as our legislative processes will allow.

Central planning has a long record of failure, but Americans have always believed that we know how to succeed where others can’t. That leads to the hubris of people like Barack Obama, who says “YES WE CAN!

Read the whole thing.


Risk-Pricing, Goldman Sachs and Congress.

Maybe Goldman sold investors some rotten eggs. Maybe not. So what? Goldman argues that it is being "railroaded by Congress for performing a normal market function—pricing risk and providing investment opportunities for grown-up investors," which strikes me as precisely right. It is a central tenet of the federal securities laws that you're allowed to sell rotten eggs, so long as you disclose that they're rotten. So long as Goldman fully disclosed all material facts, the fact that Goldman thought the securities being sold were "shitty," as one scatological email reference by an unwise trader put it, is not a breach of the securities laws.

More here.

Japan Forces Bureaucrats to Defend Spending.

TOKYO — Seeking to bring its spiraling debt under control, Japan has undertaken an unlikely exercise: lawmakers are forcing bureaucrats to defend their budgets at public hearings and are slashing wanton spending.

Sounds like something we should copy.


The Insurance Mandate in Peril.

A"tell" in poker is a subtle but detectable change in a player's behavior or demeanor that reveals clues about the player's assessment of his hand. Something similar has happened with regard to the insurance mandate at the core of last month's health reform legislation. Congress justified its authority to enact the mandate on the grounds that it is a regulation of commerce. But as this justification came under heavy constitutional fire, the mandate's defenders changed the argument—now claiming constitutional authority under Congress's power to tax.

This switch in constitutional theories is a tell: Defenders of the bill lack confidence in their commerce power theory. The switch also comes too late. When the mandate's constitutionality comes up for review as part of the state attorneys general lawsuit, the Supreme Court will not consider the penalty enforcing the mandate to be a tax because, in the provision that actually defines and imposes the mandate and penalty, Congress did not call it a tax and did not treat it as a tax.

More here.