15 October 2009

Today’s Tabbloid
PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com

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Wednesday Links [Cato at Race to the Top = Klondike Bar

Liberty] [Cato at Liberty]
OCT 14, 2009 05:33P.M. OCT 14, 2009 01:55P.M.

• Why there’s no way to enforce a ban on texting while driving. Remember the ads in which actors…er, people…would enthusiastically
do demeaning things for Klondike Bars? You know, ads like this one, in
• How onerous financial rules will only delay economic recovery and which Shakespeare stoops to writing a TV sitcom in exchange for one
dampen long-term growth. of those chocolate-encrusted ice cream blocks?

• It’s time to start over on health care reform: “If you’re going the
wrong way down a road, the answer isn’t to step on the gas, but to
turn around.”
• Is the current recession the worst since the Great Depression? You
might be surprised…
• When “history” dials the wrong number.
• Podcast: Will the GOP of 2010 Be led by ideas?
The message, of course, was that the Bard and all the other Klondike-
cravers took the deals for the dessert, not, obviously, for the love of what
they were being bribed to do. They just wanted the reward – even the
biggest idiot understood that.
Sadly, it seems that U.S. Secretary of Education Arne Duncan might
be hoping that the public is dumber than the biggest idiot. In a recent
interview, he talked as if there might actually be states suddenly making
education changes needed to get part of his $5-billion “Race to the Top”
fund not because they want the money, but because the reforms are the
right thing to do.

“It’s really not about the money – it’s about pushing a strong reform
FISCALLY CONSERVATIVE BLOG FEEDS agenda that’s going to improve student achievement,” he said. “We’re
going to invest in those states that aren’t just talking the talk but that are
Socialised Medicine in Australia walking the walk….If folks are doing this to chase money, it’s for the
wrong reasons.”
[Americans for Tax Reform]
OCT 14, 2009 03:29P.M. Only in politics would you bribe people to act, then declare that they’d
better not be acting just to get the bribe. But you wouldn’t want the
We hear a lot about the failings of socialised medicine in the UK and public realizing that politicians and bureaucrats are just as selfish as
Canada, but these aren’t the only countries that have government-run corporate titans or swindlers, would you?
health care. Australia also has a socialised health service, ...
The problem Duncan is trying to deal with, of course, is convincing the
public that reforms coerced with Race-to-the-Top dollars will stay in
place after the one-shot-deal bucks are gone. But as even the biggest
couch potato knows, Shakespeare simply won’t write for Gary Coleman if
there’s no ice cream at the end.

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What Is Regulation? [Cato at
Liberty]
OCT 14, 2009 01:38P.M.
The New York Times tries to spin the work of Nobel laureates Elinor
Ostrom and Oliver Williamson as not anti-regulation:
Neither Ms. Ostrom nor Mr. Williamson has argued against
regulation. Quite the contrary, their work found that people
in business adopt for themselves numerous forms of
regulation and rules of behavior — called “governance” in
economic jargon — doing so independently of government or
without being told to do so by corporate bosses.
But none of us “anti-regulation” folks are against “rules of behavior that
people in business adopt for themselves independently of government.”
The world is full of rules, from wearing clothes in the office to customary
trade practices to the rules for managing common-pool resources that
Ostrom studied. Anyone who opposed such “forms of regulation”
wouldn’t be a libertarian or even an anarchist — he’d be a nihilist. (Of
course, one could sensibly oppose particular rules; but no one seriously
wants a world without rules of behavior.)
David Henderson analyzes one of the misunderstandings about the
laureates’ findings:
Some have summarized their work by saying that institutions
other than free markets often work well. But that statement
can mislead you to conclude that government solutions are
the answer. Free markets are only a subset of free
institutions. A better way to sum up their work is that what
Ms. Ostrom and Mr. Willamson really show is that voluntary
associations work.
The Concise Encyclopedia of Economics defines “regulation” this way:
“Regulation consists of requirements the government imposes on private
firms and individuals to achieve government’s purposes.” That’s the kind
of regulation that is controversial among economists and often criticized
by libertarians. It is entirely different from “rules of behavior that people
in business adopt for themselves independently of government.” Those
sorts of rules — often called “governance,” as the New York Times notes
— are private and voluntary, made by the voluntary interactions of a few
or many people.
The work of Ostrom and Williamson supports the idea of spontaneous
order, an order that emerges as result of the voluntary activities of
individuals and not through the commands of government. Spontaneous
order can be hard to grasp, though it is the background of our entire
world — language, common law, money, and the economy are all
spontaneous orders (though government has intruded into some of those
orders). It’s misleading to say that work of Ostrom and Williamson is
somehow supportive of “regulation,” given the way that word is
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commonly used.
Sheldon Richman made a similar point back in June and wrote a
Facebook note on the same paragraph that caught my eye.
FISCALLY CONSERVATIVE BLOG FEEDS
Technology: Debating the Pace
of Progress [Cato at Liberty]
OCT 14, 2009 01:33P.M.
Last night, thanks to Craigslist and a Web-enabled cell phone, I
unloaded two extra tickets to tonight’s World Cup qualifying game
between the U.S. and Costa Rica in under an hour. (8:00, ESPN2 “USA!
USA! USA!”)
Wanting to avoid the hassle of selling the tickets at RFK, I placed an ad
on Craigslist offering them at cost, figuring I might find a taker and
arrange to hand them off downtown today or at the stadium tonight.
Checking email as I walked to the gym, I found an inquiry about the
tickets and phoned the guy, who happened to live 100 feet from where I
was walking. A few minutes later, he had the tickets and I had the cash.
This quaint story is a single data point in a trend line—the high-tech
version of It’s Getting Better All the Time. Everyone living a connected
life enjoys hundreds, or even thousands, of conveniences every day
because of information technology. Through billions of transactions
across the society, technology improves our lives in ways unimaginable
two decades ago.
Before 1995, nobody ever traded spare soccer tickets in under an hour,
on a Tuesday night, without even changing his evening routine. If soccer
tickets are too trivial (you must not understand the game), the same
dynamics deliver incremental, but massive improvements in material
wealth, awareness, education, and social and political empowerment to
everyone—even those who don’t live “online.”
Sometimes debates about technology regulation are cast in doom and
gloom terms like the Malthusian arguments about material wealth. But
the benefits we already enjoy thanks to technology are not going away,
and they will continue to accrue. We are arguing about the pace of
progress, not its existence.
This is no reason to let up in our quest to give technologists and investors
the freedom to produce more innovations that enhance everyone’s well-
being even more. But it does counsel us to be optimistic and to teach this
optimism to our ideological opponents, many of whom seem to look
ahead and see only calamity.
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Do We Need a Law against Dow 10,000: Special Kudlow

Texting While Driving? [Cato at Report [Larry Kudlow’s Money
Liberty] Politic$]
OCT 14, 2009 01:30P.M. OCT 14, 2009 12:46P.M.

Radley Balko exposes the politicians who play the game of enacting laws
for symbolic purposes. In this game, whether the proposed law has any
actual impact on the supposed problem seems entirely beside the point.
Excerpt:

Maryland just passed a texting ban, but state officials are

flummoxed over how to enforce it. The law bans texting while
driving but allows for reading texts, for precisely the reasons
just mentioned. But how can a police officer positioned at the
side of a highway tell if the driver of the car that just flew by
was actually pushing buttons on his cellphone and not merely
reading the display screen? Unless a motorist is blatantly
typing away at eye level, a car would need to be moving
slowly enough for an officer to see inside, focus on the phone,
Tonight at 7pm ET on CNBC:
and observe the driver manipulating the buttons. Which is to
say the car would probably need to be stopped—at which
point it ceases to be a safety hazard.
A MARKET MILESTONE
Is the rally for real?
Read the whole thing. Until this feel-good-gesture-legislation game is
broken up, the number of laws will continue to multiply. And that means
the sphere of government expands while the sphere of liberty recedes.

*Mario Gabelli, Gabelli Funds Chairman

*Bob Doll, BlackRock Vice Chair & Global CIO of Equities
*Ronald Kruszewski, Stifel, Nicolaus Chairman & CEO
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*Allison Deans, Fmr. Chief Investment Officer for Neuberger Berman
How Cap and Tax Will Hurt Private Asset Management

Texas [Americans for Tax WHAT DOES THE DOLLAR MEAN FOR STOCKS?
CNBC’s Rick Santelli will weigh in with the market panel.
Reform] REMEMBERING LAZARD CEO BRUCE WASSERSTEIN
OCT 14, 2009 12:49P.M.
CNBC’s David Faber will join us.

In our continuing, daily, state by state, look at the financial impact of the
EYE ON TECH
Waxman-Markey Cap and Trade Tax Bill, we will show you the projected
losses in Gross State Product, Personal Income, and N...
*Bob Froehlich, The Hartford Senior Managing Director
*CNBC’s Jim Goldman

CAN YOU BANK ON BANKS?

A look at bank bonuses & regulation

*Dick Bove, Financial Strategist Rochdale Securities

*Robert Albertson, Sandler O’Neill, Principal & Chief Strategist

DOW 10,000: THEN & NOW

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 15 October 2009

CNBC’s Mary Thompson will take a look back. platform.

Please join us this evening at 7pm ET on CNBC.

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FISCALLY CONSERVATIVE BLOG FEEDS Wednesday’s Daily News [The

Dow Hits 10,000 as Storm Club for Growth]
OCT 14, 2009 11:59A.M.
Clouds Gather [Larry Kudlow’s
These are the people to watch in the health care debate’s next phase.
Money Politic$]
OCT 14, 2009 12:43P.M. Geithner’s aides reaped millions working for banks and hedge funds.

Dow Jones 10,000 arrived on Wall Street today for the first time in a Economist Doug Holtz-Eakins says the Baucus bill is a tax bill.
year. It’s a milestone of sorts, and it certainly represents a vote for
investor confidence in economic recovery. Blowout profit reports form The vote on the Baucus bill opens the healthcare lobbying floodgates.
Intel and JPMorgan helped fuel today’s 145 point gain. So did a retail
sales report that excluding Cash for Clunkers was actually quite strong. The Wall Street Journal editorial board looks at your Massachusetts
future in healthcare.
Profits are the mother’s milk of stocks, business, and the economy. And
top-line sales revenues now appear to be bolstering the corporate cost- Here’s how you can measure the (in)effectiveness of Obama’s stimulus
cutting effort. As long as these earnings keep coming in strong, stocks plan.
will keep rising. My hunch is that we’ll move back to pre-Lehman levels
— to over 11,000 on the Dow and over 1,200 on the S&P. And backed by Michigan Democrats want to tax doctors 3% in order to balance the
an easy-money Fed, the economy will probably grow in a mild V-shape of budget. Um, yeah.
something like 3 to 4 percent for the next year or so.
John Stossel has a review of Michael Moore’s new movie.
But storm clouds are gathering. And a big one is the sinking dollar. No
one in the Obama administration or at the Fed seems to care about it. In Megan McArdles wants to know when the obsession with GDP will end.
fact, they are probably applauding the lower dollar as a sort of 1970s way
of boosting exports and the manufacturing heartland in the Midwest. But NY-23: GOP’s Scozzafava faces cash crunch.
the falling dollar is bad for consumers. And it ultimately will cause
higher inflation, as signaled by the rising gold price. There also are future PA-Sen: Poll shows Specter staring at ‘near fatal’ 31 percent re-election
tax hikes and the explosion of spending and debt. All of this is why it’s figure.
hard for me to be a long-term bull.

The great market boom of 1982 to 2000 was basically characterized by

low marginal tax rates and King Dollar. Unfortunately, the 21st century
has seen a weak dollar and more recently rising tax rates that are coming
due in 2011 (if not sooner). In other words, the prosperity-inducing
Mundell-Laffer supply-side model is being reversed.

As Art Laffer put it to me, we are stealing demand and production from
the future. So even as we get a V-shaped recovery now and into next
year, 2011 may pay the piper for both low growth and higher inflation.

Stocks could have another four to six months to rally. And that’s great for
increasing the wealth of the investor class, and maybe even enhancing
the animal spirits a bit. But the policy mix is wrong. Health-care
entitlements and taxes punctuate the wrong-way policy mix. And what’s
left to be seen is whether the Republicans can successfully challenge the
Democrats with a true supply-side economic-growth and job-creating

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Sound Money Essay Contest
[Cato at Liberty]
OCT 14, 2009 11:16A.M.
Our friends at the Atlas Economic Research Foundation are offering
prizes for the best essays on sound money by students and young faculty
and policy analysts:
The Atlas Economic Research Foundation invites you to
participate in its Sound Money Essay Contest, which has a
deadline of November 24th, 2009.
The contest is open to students, young faculty, and policy
writers who are interested in the cause of sound money. It
aims to engage you in thinking about sound money principles
with relevance to today’s economic challenges.
The overall winner will receive a cash prize of $5000. Two
additional prizes of $1000 each will be given to outstanding
essays written by junior faculty, graduate students, or policy
writers. And three additional prizes of $500 each will be
given to outstanding essays written by undergraduate
students.
Essay topics include:
· “Money and the Free Society: Can Money Exist Outside of
the State?”
· “The Ethical Implications of Monetary Manipulation”
· “Monetary Policy and the Rule of Law in the United States”
To be eligible, you must be a legal resident of the U.S. or
engaged as a full-time student or faculty in the U.S. You must
also be no more than 35 years old on the date of the contest
deadline (November 24, 2009). Atlas welcomes involvement
of older and non-U.S. scholars in its discussions and ongoing
work on sound money, but this essay contest is targeted to
the audience described above.
For a list of reference materials and writing guidelines, please
visit the Atlas website.
And for Cato research on sound money, check here.
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Libertarianism on TV [Cato at
Liberty]
OCT 14, 2009 10:39A.M.
I talked with Dennis McCuistion, whose interview program appears on
KERA in Dallas and other public television stations, about
“libertarianism and the politics of freedom.” It’s an old-fashioned public
affairs program, where the host asks intelligent questions for half an
hour. No shouting, no four-minute segments, a good solid conversation.
Find the video here. Other McCuistion programs with such guests as Dan
Mitchell, Steve Moore, and Steve Forbes can be found here.
FISCALLY CONSERVATIVE BLOG FEEDS
Club Op-Ed in USA Today [The
Club for Growth]
OCT 14, 2009 10:25A.M.
Club President Chris Chocola has an op-ed in this morning’s USA Today.
The newspaper’s editorial board argues that the GOP needs to elect more
moderates so that DC can become a more bipartisan place. Providing the
opposing view, Chocola argues that bipartisanship is highly overrated.
Excerpt:
Politics is about the battle of ideas and choices. Democrats
did not win the majority in Congress or the White House by
compromising. They did not oust the Republicans by helping
them pass an agenda they did not agree with. They did not
come into power by following advice to be more bipartisan.
They did what the Republicans must now do to have any
chance of gaining a sustainable majority and advancing their
ideas. They fought for what they believed in.
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The Improving State of New
York City, circa 1800-2007
[Cato at Liberty]
OCT 14, 2009 08:50A.M.
Two figures that say it all.
Death Rates (deaths per 1,000 population), New York City, c. 1800-
2007. Source: NYC Department of Health & Mental Hygiene.
Summary of Vital Statistics (2008). H/T to William Briggs for making
me aware of this figure.
Infant Mortality Rate (deaths per 1,000 live births), New York City,
1898-2007. In 1898 IMR was estimated to be 140.9 Because of
incomplete reporting of early neonatal deaths, this is almost certainly
an underestimate. In 2007 IMR was 5.4 deaths per 1,000 live births.
Source: NYC Department of Health & Mental Hygiene. Summary of
Vital Statistics (2008)
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A Tax That Would Finance the
Road to Serfdom [Cato at
Liberty]
OCT 14, 2009 08:40A.M.
Michael Tanner and Michael Cannon are working nonstop to derail
government-run health care, but they better figure out how to work more
than 24 hours per day, because if they fail, it is very likely that politicians
will then look for a new revenue source to finance all the new spending
that inevitably will follow. Unfortunately, that means a value-added tax
(VAT) will be high on the list. Indeed, the VAT recently has been
discussed by powerful political figures and key Obama allies such as the
Co-Chairman of his transition team and the Speaker of the House.
The VAT would be great news for the political insiders and beltway elite.
A brand new source of revenue would mean more money for them to
spend and a new set of loopholes to swap for campaign cash and
lobbying fees. But as I explain in this new video from the Center for
Freedom and Prosperity, the evidence from Europe unambiguously
suggests that a VAT will dramatically increase the burden of government.
That’s good for Washington, but bad for America.
Even if the politicians are unsuccessful in their campaign to take over the
health care system, there will be a VAT fight at some point in the next
few years. This will be a Armageddon moment for proponents of limited
government. Defeating a VAT is not a sufficient condition for controlling
the size of government, but it surely is a necessary condition.
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The Dollar Decline Must End
[Larry Kudlow’s Money
Politic$]
OCT 14, 2009 07:14A.M.
You know I’ve been crusading to save the greenback and restore King
Dollar. But new entitlements that open the door to a government
takeover of the health-care sector are no way to do it. Not surprisingly, as
the Baucus Bill made it out of the Finance Committee yesterday, the
dollar fell once again and gold jumped (closing at $1,064). Not good.
Smells like the 1970s.
Just look at two ominous headlines in the news: First is the global shift
out of the dollar and into commodities. Second is the dollar losing its
reserve status to the yen and the euro.
In the second quarter ending in June, central banks around the world
Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 15 October 2009

invested 63 percent of their new cash reserves into euro and yen, and put
only 37 percent into dollars. Over the past six months, the dollar has lost
15 percent while gold has climbed nearly $150. If this continues, spiking
inflation and interest rates will choke off the bull market in stocks and do
serious damage to the economy. It could happen fast.

How to solve this problem? In supply-side terms, cut tax rates for new
growth incentives. Meanwhile, the Fed must drain cash to remove
dollars from the financial system and the Treasury must simultaneously
buy dollars in the foreign-exchange markets.

And Washington must stop its explosive spending and borrowing. Some
statutory — or even constitutional — limits should be set.

That the dollar is the world’s reserve currency is a tremendous asset for
the United States. We must stop the fall of the dollar now. It’s a self-
inflicted wound that will do great damage to American leadership and
prestige globally, and to the economy here at home.

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An Interview with Sen. John

Thune [Larry Kudlow’s Money
Politic$]
OCT 14, 2009 06:10A.M.

Last night distinguished South Dakota Sen. John Thune, chairman of the
Senate Republican Policy Committee, joined me to discuss the $829
billion Baucus bill just passed by the Senate Finance Committee, as well
as the need for a clear TARP exit strategy. He’s got the story right on
both.

The interview begins at the 3:50 mark.