On the other hand, the fact that the Foundation for Economic Education still exists 65 years after its start and recently hosted Yaron Brook of the Ayn Rand Institute pleases me greatly.
Recently in Politics Category
This is hard to watch.I am generally very bullish on people. But looking at the utter ignorance on display in that video worries me greatly.
I am very excited by Gary Johnson—he's the best candidate I've come across since Steve Forbes. Moreover, he has all the pedigree you'd want in a presidential candidate: two-term popular governor, successful businessman, outdoorsman, and no hint of scandal.
Everything I've heard from suggests that he's the best of Ron Paul without all the crazy. He wants a self-interested foreign policy; supports abortion rights; wants to abolish HUD, the TSA, and the Department of Education; and thinks the government has no business in traditional social conservative issues.
Unfortunately, he's been routinely ignored by the media. That doesn't bode well: it seems like the media wants the Tea Party portrayed as being represented by the likes of Michele Bachmann, Ron Paul, and Sarah Palin. The thinking seems to be that independents will recoil (rightly so) at those candidates and end up selecting Mitt Romney during the primary.
That would be a travesty, as Johnson is the best choice for Tea Party types. He doesn't want to enforce any religion or morality, and he seems to understand the role of individual rights in government. Also, he has an actual plan for balancing the budget and a track record in New Mexico for cutting spending.
I have a very low opinion of politicians in general. Every election is, for me, an odious experience wherein I vote for the candidate that disgusts me the least and might act for liberty 25% of the time instead of the rest of the field's 10-15%. As I have mentioned before, the only candidate I ever supported to any extent was Steve Forbes.
When the Goldwater Institute announced yesterday that it had developed a pledge of support for individual rights—reproduced in full below—that political candidates could endorse, I was dubious. Politicians will say anything to get re-elected and candidates will say even more. Furthermore, the understanding of "individual rights" among politicians is utterly laughable.
When I saw the initial set of signatories, I had my suspicions confirmed. The list includes such luminaries as Tom Horne, Andrew Thomas, and Russell Pearce. The few other signers I recognize are your standard conservative fare—guns, God, and gringos.
What is going on in the state of Arizona now and in most of the recent past has nothing to do with individual rights. A principled defense of individual rights is simply not possible for an unprincipled politician who daily spends the property his legislative signature causes to be stolen and restricts the freedom of those his legislation enshackles. You can't be both the whip-master and the abolitionist.
Individual Rights Protection Pledge
I support the opening declaration of the Arizona Constitution which reads, “Governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights…” I pledge to use my elected office to protect and maintain the individual rights of the citizens of Arizona. I will focus my lawmaking authority on keeping government focused on its core functions in an effort to protect individual rights. I will carefully consider how each vote I make and each law and regulation I support will impact the right of Arizonans to live their lives free from excessive government interference. I pledge that actions I take as an elected official will comply with the Arizona and U.S. Constitutions.
Furthermore, I pledge to respect the intentions of our state’s framers by complying with the spirit of the taxpayer protections included in our state constitution. Specifically:
- I will respect the intention that our state founders set by including a debt limit in the Arizona Constitution. I will commit to stop deficit spending. I will not vote for a budget that adds to the state’s (or county’s) structural deficit, including sale-leaseback or securitization schemes and “roll-overs.” I will not vote to increase the size of any program’s budget, including education, while the state (or county) faces a structural deficit.
- I will respect the intention that our state founders set by including the “gift clause” in the Arizona Constitution. I will support tax proposals that apply equally to all taxpayers. I will not support laws that single out certain industries or individual companies for special tax benefits or penalties, except those that eliminate tax or regulatory burdens that are specific to one industry.
I suggest that we return to first principles. At the top of that list has to be a recommitment to limited government. After eight years of profligate spending and soaring deficits, voters can be forgiven for not knowing that limited government has long been the first article of faith for Republicans.
Second, we need to recommit to our belief in economic freedom. Adam Smith's "The Wealth of Nations" may be on the discount rack this year, but the free market is still the most efficient means to allocate capital and human resources in an economy, and Americans know it. Now that we've inserted government deeply into the private sector by bailing out banks and businesses, the temptation will be for government to overstay its welcome and force the distribution of resources to serve political ends. Substituting political for economic incentives is not the recipe for economic recovery.
Let's compare how I voted to how the rest of my Arizonans voted. Outside of my district and county, I pretty much am out of step. I'm glad they voted down the "homeowner's bill of rights" and took a tax on home sales off the table permanently, but they also stopped same-sex marriage with a constitutional amendment, snuffed payday loans out of existence, and enabled a Masschusetts-style denial of private insurance.
My wife thinks that the proposition voting mirrored the spending trends on commercials. I cannot believe that, but it's a compelling argument. Some of the proposition wording was very precise and commercials about those measures were very deceptive—did people not look into the matter further?
It's done finally, so now's the time to move on and start accepting the outcome. I have got a couple of months to lay low, relax, and study before I join the Kulturkampf. An Obama presidency is a grand opportunity to publicize Ayn Rand and Objectivism since he represents such a stark contrast to us.
|U.S. Representative, District 3||Shadegg||Shadegg|
|State Senator, District 6||Gorman||Gorman|
|State Representative, District 6||Crump||Crump, Seel|
|Corporation Commissioner||Wong, McClure, Stump||Kennedy, Newman, George|
|Maricopa County Board of Supervisors, District 3||Kunasek||Kunsaek|
|Maricopa County Assessor||Russell||Russell|
|Maricopa County Attorney||Thomas||Thomas|
|Maricopa County Recorder||Purcell||Purcell|
|Maricopa County School Superintendent||Covey||Covey|
|Maricopa County Sheriff||Saban||Arpaio|
|Maricopa County Treasurer||Hoskins||Hoskins|
|Justice of the Peace, Desert Ridge||Henderson (write-in)||Jayne|
|Constable, Desert Ridge||Hazlett||Hazlett|
|Maricopa County Special Health Care District, District 3||Gerard||Gerard|
|Maricopa County Community College, District 3||Petty||Pearson|
|PVUSD School Board||Kenyon, Case, Greenberg||Case, Greenberg, Skidmore|
|PVUSD Question 1||No||No|
|PVUSD Question 2||No||Yes|
Barack Obama is president.
I listened to John McCain's concession speech with disgust. It succinctly summed up McCain: a pragmatist and compromiser to the end. A principled opponent would have conceded the battle but laid the groundwork for the larger war. He would have pledged to relight the flame of liberty during the dark times ahead.
In today's climate, such a speech is unthinkable. Unity is the buzzword of the day. Like many times during his flawed, unprincipled run at the presidency, I sought comfort in the 1964 campaign. After listening to McCain's terrible convention acceptance speech, Goldwater's was a palliative. I figured that his concession in that same year might provide the inspiring call to action that McCain's wasn't. There's some of that but I think there must be a pattern of graciousness in these matters that I was unaware of. Or maybe the losing candidates are just as sick of campaigning as we are.
I've waited 'til now to make any statement about this election because I wanted to find out more of the details of the vote—not just the total but the spread of it, what it might portend at this very early date.
I know many of you expected me to make some statement last night but I held that off. I sent the President the following wire, which I think will be available for you if you don't have it now:
"To President Lyndon Johnson in Johnson City, Texas.
Congratulations on your victory. I will help you in any way that I can toward achieving a growing and better America and a secure and dignified peace. The role of the Republican party will remain in that temper but it also remains the party of opposition when opposition is called for. There is much to be done with Vietnam, Cuba, the problem of law and order in this country, and a productive economy. Communism remains our No. 1 obstacle to peace and I know that all Americans will join with you in honest solutions to these problems."
I have no bitterness, no rancor at all. I say to the President as a fellow politician that he did a wonderful job. He put together a vote total that's larger than has ever been gained in this country.
However, it's interesting to me and very surprising to me that the latest figures that I can get do not reach the totals of the 1960 election. I am disappointed in this because I thought that the American people would have turned out in greater numbers than they seem to have done.
But he did a good job and I have to congratulate him on it.
Also I want to express my gratitude to the more than 25 million people in this country who not necessarily voted for me but they voted for a philosophy I represent, a Republican philosophy that I believe the Republican party must cling to and strengthen in the years ahead.
I want to thank all of you across this nation who turned out in those numbers to support my candidacy and that of Bill Miller and the Republican party.
I don't think that I've ever seen more dedicated people in my life, people who worked as hard or who worked as long and produced the results that they did. These people are dedicated to, as I say, the Republican philosophy.
There is a two-party system in this country and we're going to keep it. We're going to devote our days and the years ahead to strengthening the Republican party, to getting more people into it and I feel that the young people coming along will provide the army that we need.
This effort that we engaged in last January 3 turns out to be a much longer effort than we thought. It's not an effort that we can drop now nor do we have any intentions of dropping it now.
I will devote—being unemployed as of January 3 or thereabouts—I'll have a lot of time to devote to this party, to its leadership and to the strengthening of the party, and that I have every intention of doing. I want to just ask the people in this country who worked so hard in this election not to be despondent, that we have a job to do and let's get along with it, because there are many questions that have to be answered.
I'm very hopeful that the President will, now that the election is over, get along with the answers that we've sought during the campaign—the answers about Vietnam, about Cuba, about Communism—Communism's continuing growth all around the world—about the growing tendency to the control of our economy and our daily lives in this country.
As I said in my wire, anything that I can do—and I'm sure that I speak for all Americans—anything that we can do to help the President get along with the solutions to these problems, we're ready, willing and able to do.
Now with that I have nothing further to say. I will entertain a few questions—not any prolonged period at it. Mr. Wagner will recognize.
I voted for John McCain. I'd like to think it was a vote against Barack Obama, but that's just kidding myself. I've heard many Objectivists, conservatives, and libertarians say that they were going to vote for Obama and I was sympathetic to a point.
The rationale for such a counterintuitive move takes one of the following forms:
- Obama has never done anything in his life except fall into positions of power. He did nothing on the Harvard Law Review, he did barely anything while in the Illinois legislature, and he's voted present more than yes or no while in the Senate. He talks a great game, but if elected he'd probably spend most of his time campaigning for re-election.
- The Republicans in Congress would be forced into the role of the opposition party and would thus prevent his more egregious efforts towards socialism from bearing fruit.
- When America's economy is wrecked and our health care system is a-shambles, it'll be a socialist at the helm. No one can blame capitalism for the situation. So it should be the end of the century-long love affair with socialism in much the same way that the fall of the Soviet Union marked the end of Communism as a legitimate political viewpoint.
- Voting against McCain will send a message to the religious right that the party needs to return to its small government platform.
- McCain is an enemy of free speech as witnessed by his sponsorship and promotion of McCain-Feingold, the primary vehicle of campaign finance regulation. He should not be put in a position of even greater power.
In a rationalistic sense, each of these seem like a sensible strategy. Divorced from political reality, they're plausible. But in today's environment, they are completely irrelevant and futile—if not terribly naïve. Each one neglects crucial facts that both undermine and undercut their viability.
Obama hasn't accomplished much in his life, given the position he finds himself at today. To have risen so quickly, most people would have had a string of milestones or achievements that would inspire or earn respect. McCain's been a senator for a very long time and all of the other candidates, both Democrat and Republican, had relatively lengthy resumés behind them. Obama has none of that. So it's easy to underestimate his acumen or ambition. His "present" votes were politically shrewd and every step he's taken has seemed to be with an eye towards the presidency. He's made no move that would betray his carefully-crafted moderate politician persona—except maybe his ACORN litigation or his membership in the socialist New Party. If you read the story of ACORN's "inside strategy," you can easily recognize Obama's "lay low and get power" path. Ignore that at your own peril.
Often, the same people that argue for the Republicans as better in opposition to a Democrat president than when they're in power are the same ones who argue that the GOP has been co-opted by the religious right and have abandoned any limited government principles they may have once had. Expecting the Republicans in Congress to act as a bulwark against creeping (or galloping) socialism is investing in them an unwarranted hope. They have been ascendant in Congress for quite some time and they have brought the federal government to unprecedented spending and regulatory levels. To think that losing the presidency would make them do a double-take and wise up is ludicrous.
To be sure, Obama will wreck the economy and ruin the health care system. If he wins, his mandate as the first black president and a complicit Congress will insure that whatever he wants will sail through the legislature and into law. When his plans run into the inevitable obstacles (like crazies still expecting property rights to be upheld), he will have no trouble assigning blame to capitalism and those who want a free-for-all. He called the situation that led to the bailout plan the "final verdict on an economic philosophy that has completely failed" even though it was demonstrably caused by government intervention. Others stepped up to agree with his assessment. There were voices raised at the absurdity of this, but they were few and far between. It certainly wasn't from Republicans in Congress.
If Obama wins, I can't see how the religious right will be cowed. McCain was not their darling—quite the opposite, in fact. I could easily see how they could declare that McCain lost precisely because he had alienated this supposedly all-important base of support. They won't vote for Obama, but they may withhold their vote and that may be enough to throw the election. Given how close Romney and Huckabee got to passing the primary test, I find it hard to believe that an Obama election will do anything but embolden the religious right.
Finally, my fellow travelers object to McCain's support of free-speech restrictions. I'm there: it is very disgusting to me that anyone could sponsor such ignoble legislation. The right of free speech is never so important as when it comes to the political sphere. But lets not give Barack Obama a pass on this one: he wants to bring criminal charges against an organization that produced an ad linking him to William Ayers, he's used his campaign as a way to shout down those who oppose him, and his party is chomping at the bit to restore the Fairness Doctrine, which he ostensibly opposes. There is reason to expect that the intolerant political correctness will be coming to the greater body politic: there's already some trial balloons floating about the "angry mob" that McCain-Palin is stirring and bringing out the H-word.
So that is why I couldn't possibly vote for Obama. I think he has covered his socialist trail well enough that he stands an excellent chance of getting elected, especially given his admirers within the media. Once in power, I predict that his true intentions will be revealed: we will start down the path that Europe has blazed for the last 75 years and plenty of new programs will be enacted that will be difficult to rescind. He's an avowed pragmatist whose political reality exists in the liberal atmosphere. (I won't even get into the cult of personality that freaks me out.) I cannot in good conscience help that one along in his quest for power over me even though McCain is terrible and I am sad that it comes down to this choice.
[UPDATE: Here's more about the Obama-ACORN link.]
[UPDATE (10/15/2008): More cult of personality creepiness.]
"It's not the proper role of government to prop up stocks, housing or any other market. Yet like the vaudeville performer on the old Ed Sullivan show, politicians now see their duty as to keep the plates spinning just a few more months, maintaining constituents in their homes and jobs at least until after the elections, without any thought to the long-term cost being paid to do so."
"What Americans don't get, however, is that the goal of the bill isn’t to help Wall Street or Main Street, but to centralize power in Washington. Not surprisingly, that's where its biggest proponents just happen to reside." – Jonathan Hoenig "Politicians Use Bailout to Grab More Power"
I am a longtime fan of John Shadegg. I have voted for him in every election he's been on my ballot. I was heartened to see his name in opposition to the bailout bill when it failed in the House of Representatives. And I was disgusted when I saw his name in support when it came back around, this time with pork.
My initial idea was to punish him by voting for Bob Lord, his Democratic opponent. But that was just the initial feeling of betrayal talking. If I let politicians stabbing me in the back determine who to vote for, my voting would be governed solely by revenge. In today's political climate of unprincipled pragmatism, flipping politicians are in fashion.
After reading his reason for the reversal, I'm certain that he is definitely not his father. If Barack Obama gets elected, we'll need all the Republicans we can get in Congress so I just couldn't let my disappointment affect the long-range view. And he is more oriented towards small government than most of his GOP brethren.
Here's how I voted, starting at the top of my ballot and working my way down:
- President: John McCain
- U.S. Representative, District 3: John Shadegg
- State Senator, District 6: Pamela Gorman
State Representative, District 6:
- Sam Crump
- Barry Wong
- Marian McClure
- Bob Stump
- Maricopa County Board of Supervisors, District 3: Andy Kunasek
- Maricopa County Assessor: Keith Russell
- Maricopa County Attorney: Andrew Thomas
- Maricopa County Recorder: Helen Purcell
- Maricopa County School Superintendent: Don Covey
- Maricopa County Sheriff: Dan Saban
- Maricopa County Treasurer: Charles "Hos" Hoskins
- Justice of the Peace, Desert Ridge: Paul Henderson (write-in)
- Constable, Desert Ridge: Cory Hazlett
- Maricopa County Special Health Care District, District 3: Susan Gerard
- Maricopa County Community College, District 3: Pam Petty
PVUSD Board Member:
- West Kenyon
- Nancy Case
- Anne Greenberg
- Question 1: NO
- Question 2: NO
Here's how I voted on the propositions:
If you are interested in why I voted for a particular candidate or proposition, leave a comment.
Many have asked me who I'm voting for this November. My stock answer is "I'm voting against Obama." We all laugh and then I get to disparage McCain while touching on my fear of the government expansion that Obama is seeking. Sometimes I get assent about that growth but many other times I get a puzzled look or even, puzzlingly to me, a disagreement that he's going to expand the federal government in a big way.
This Investor's Business Daily editorial does a decent job of covering the salient planks of Obama's platform that should give pause to all freedom-loving Americans. Really though, a good reading of his campaign's policy issues sections ought to make you an anti-Obama voter too.
I could go through his platform plank by plank, but I'm not sure anyone reading this would be interested. Leave a comment if you would be…
Washington Mutual was just closed down and its assets sold to JP Morgan Chase and Company. This means that I am once again a Chase customer. Is there no refuge from the customer service hell that is Chase?
To my mind, this reinforces the idea that a private solution exists in consolidation as well as that John Allison was exactly right in damning poorly-run banks. Washington Mutual was holding about $70 billion in bad mortgage debt and lost $3.3 billion in the second quarter.
Unfortunately, I'd wager that this episode will contribute to the sense of panic in our politicians, lending further urgency to get something—anything—done. Things are seeming increasingly inexorable—if this bailout takes place, we will feel the consequences for decades.
[UPDATE (9/26/2008): My mistake, it "has to happen."]
[UPDATE 2 (9/26/2008): I didn't really discuss it but JP Morgan is spending $1.9 billion to get $307 billion in deposits plus WaMu's significant lending portfolio. It's a fire sale and JP Morgan would have had to spend 10 times that six months ago. This bailout, though, won't work at fire sale prices so you'll see the government accepting above-market valuations when it purchases the "toxic" mortgage debts.]
John Allison, chairman of BB&T, has publicly opposed the bailout plan in a letter sent to all members of Congress. I'm a big fan of John Allison and I couldn't find the full text in any of the articles quoting from it. I did find a scan of the letter on a site that pulled it so I've hurriedly transcribed it below:
BB&T is a $136 billion multi-state banking company. We have 1,500 branches throughout the mid-Atlantic and southeast states. While we have been impacted by the real estate markets, we continue to have healthy profitability and a strong capital position.
We think it is important that Congress hear from the well run financial institutions as most of the concerns have been focused on the problem companies. It is inappropriate that the debate is largely being shaped by the financial institutions who made very poor decisions.
Attached are the issues that we believe are relevant from the perspective of healthy banks. Your consideration of these issues is greatly appreciated.
Key Points on "Rescue" Plan From a Healthy Bank's Perspective
- Freddie Mac and Fannie Mae are the primary cause of the mortgage crisis. These government supported enterprises distorted normal market risk mechanisms. While individual private financial institutions have made serious mistakes, the problems in the financial system have been caused by government policies including, affordable housing (now sub-prime), combined with the market disruptions caused by the Federal Reserve holding interest rates too low and then raising interest rates too high.
- There is no panic on Main Street and in sound financial institutions. The problems are in high-risk financial institutions and on Wall Street.
- While all financial intermediaries are being impacted by liquidity issues, this is primarily a bailout of poorly run financial institutions. It is extremely important that the bailout not damage well run companies.
- Corrections are not all bad. The market correction process eliminates irrational competitors. There were a number of poorly managed institutions and poorly made financial decisions during the real estate boom. It is important that any rules post "rescue" punish the poorly run institutions and not punish the well run companies.
- A significant and immediate tax credit for purchasing homes would be a far less expensive and more effective cure for the mortgage market and financial system than the proposed "rescue" plan.
- This is a housing value crisis. It does not make economic sense to purchase credit card loans, automobile loans, etc. The goverment should directly purchase housing assets, not real estate bonds. This would include lots and houses under construction.
- The guaranty of money funds by the U.S. Treasury creates enormous risk for the banking industry. Banks have been paying into the FDIC insurance fund since 1933. The fund has a limit of $100,000 per client. An arbitrary, "out of the blue" guarantee of money funds creates risk for the taxpayers and significantly distorts financial markets.
- Protecting the banking system, which is fundamentally controlled by the Federal Reserve, is an established government function. It is completely unclear why the government needs to or should bail out insurance companies, investment banks, hedge funds and foreign companies.
- It is extremely unclear how the government will price the problem real estate assets. Priced too low, the real estate markets will be worse off than if the bail out did not exist. Priced too high, the taxpayers will take huge losses. Without a market price, how can you rationally determine value?
- The proposed bankruptcy "cram down" will severely negatively impact mortgage markets and will damage well run institutions. This will provide an incentive for homeowners who are able to pay their mortgages, but have a loss in their house, to take bankruptcy and force losses on banks. (Banks would not have received the gains had the houses appreciated.) This will substantially increase the risk in mortgage lending and make mortgage pricing much higher in the future.
- Fair Value accounting should be changed immediately. It does not work when there are no market prices. If we had Fair Value accounting, as interpreted today, in the early 1990's the United States financial system would have crashed. Accounting should not drive economic activity, it should reflect it.
- The proposed new merger accounting rules should be deferred for at least five years. The new merger accounting rules are creating uncertainty for high quality companies who might potentially purchase weaker companies.
- The primary beneficiaries of the proposed rescue are Goldman Sachs and Morgan Stanley. The Treasury has a number of smart individuals, including Hank Paulson. However, Treasury is totally dominated by Wall Street investment bankers. They do not have knowledge of the commercial banking industry. Therefore, they can not be relied on to objectively assess all the implications of government policy on all financial intermediaries. The decision to protect the money funds is a clear example of a material lack of insight into the risk to the total financial system.
- Arbitrary limits on executive compensation will be self defeating. With these limits, only the failing financial institutions will participate in the "rescue," effectively making this plan a massive subsidy for incompetence. Also, how will companies attract the leadership talent to manage their business effectively with irrational compensation limits?
So much for Congress being the last bulwark to the Paulson plan. It sounds like the end result is going to be even worse than his blank check on the Treasury. As Mike Munger said, "Things aren't so bad that a panicked bunch of politicians can't make it much, much worse."
Once we get some specifics, I'll give it the ol' WTF analysis.
I was going to write something about McCain's "campaign suspension," which I regard as a brilliant, shrewd, and disgusting ploy, but then I saw Dave Galanter's entry and decided that he's pretty much nailed it.
I thought it was going to play out perfectly—though asking for a postponement of the debate was an overreach—but then David Letterman skewered him for cancelling. I think he picked up on the seeming desperation and that's going to resonate with voters, many of whom probably watch Letterman.
So what's left for McCain to do at this point? Congress is thankfully looking deliberative about the bailout and he's pledged to not campaign until a deal is brokered and the economy is "fixed." Back down and resume the campaign? Not show up to the debate? Hide? Run Palin in his stead? Each of those seems like blinking.
[UPDATE: Obama took the bait! Democrats should underestimate McCain to their peril. You don't spend nearly 30 years in Congress and rise above many scandals without being competent at politics.]
In the space of a couple of days, public opinion on the Paulson plan has shifted from grudging acceptance to incredulity. That is good: Congress should not accede to the Administration's naked power grab and I'm glad that point is fairly obvious to the layman. Unfortunately, it has engendered a realization by many liberals that this is a good opening for a power grab of their own.
House Speaker Nancy Pelosi wants to tap into that $700 billion line of credit to bail out homeowners. Representative Marcy Kaptur stopping short of calling for Wall Street executives' heads to be mounted on a pike in front of the Exchange, but not by much. The best (and most representative) grab for power by the left is by Clinton's Secretary of Labor, Robert Reich:
1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.
2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?
3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street’s outsized political power – especially when that power is being exercised to get favorable terms from taxpayers?
4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.
5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?
The wealthy have always served as a useful bogeyman for the left. In their world, someone is rich only because someone else is poor. The notion of a fixed pie underlies so much of their rhetoric and worldview. Reich is using this "crisis" as a pretext for evening things up a bit.
What he proposes is, in some ways, worse than Paulson's bailout plan. Paulson's corporate welfare is unprecedented, but mostly contained within the next two years and unlikely to be extended beyond that. Reich's plan, though, would be here to stay and would serve as a useful precedent for later interventions.
To wit, taking equity stakes in Wall Street firms that accept a bailout would make the federal government a significant shareholder and give it proxy power to do things that it can't do with regulation—"can't" because of general strictures and constraints of oversight. This model could be applied to automobile manufacturer and airline bailouts. Struggling companies might find it advantageous to petition the government for a salve in lieu of going bankrupt. Do we want the government owning businesses? Absolutely not.
Limiting or restricting employee's pay because of poor performance is the province of a firm's management or board of directors. The left has long had a hate-hate relationship with executive pay, but compensation is by contract and we should not allow the precedent of meddling with existing, lawful contracts because a politician doesn't like the terms. Or a judge, for that matter. Contract re-negotiation belongs to the two parties involved in the contract in the first place—I am terrified of the ramifications of subverting this most basic job of government.
Finally, Reich's suppression of executives' Constitutional protection to petition Congress is abhorrent. At a time when Reich has placed their necks under the jackboot, he's simultaneously muzzled their ability to complain. The average American is far removed from the Wall Street executive, but we must not lose sight of the fact that they're both still humans and Americans. Just because they're well paid doesn't mean that they waive their rights and mob rule becomes warranted.
The current situation did not arise because of a lack of regulation. George W. Bush is not—and never has been—an advocate of free markets. The financial sector is among the most heavily regulated parts of the economy; these problems stem from the very nature of regulation. Regulation is inherently imperfect: unintended consequences and unforeseen incentives rule the day. Bureaucrats aren't any more enlightened than those they oversee and they are insulated from the consequences of their actions, so they make decisions with imperfect knowledge for political reasons.
But all of that, while true, is secondary. The primary knock against regulation is individual rights. People have the right to life, liberty, and the pursuit of happiness and they don't give any of that up when they enter the financial sector, manage a company, or earn money. Much of the left ignores that fact and we can't let them blind us to it too.
[UPDATE (9/25/2008): Looks like Obama's loving Reich's folly. And McCain's cool with several of his planks.]