6 April 2010

Today’s Tabbloid
PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com

FISCALLY CONSERVATIVE BLOG FEEDS FISCALLY CONSERVATIVE BLOG FEEDS

Club for Growth in the News VAT in practice [Americans for

[The Club for Growth] Tax Reform]
APR 05, 2010 05:55P.M. APR 05, 2010 04:06P.M.

Here s Repeal It pledge. In recent weeks, more and more pundits inside the Beltway have been
raising the prospect of the Obama Administration imposing an
economically devastating Value Added Tax (VAT) as a way to pay for the
...
FISCALLY CONSERVATIVE BLOG FEEDS

Michael Faulkner is First Pledge

FISCALLY CONSERVATIVE BLOG FEEDS
Signer in NY-15 [Americans for
Is the Obama Mortgage
Tax Reform]
APR 05, 2010 04:25P.M. Foreclosure Plan Legal? [Cato at
Michael Faulkner, a congressional candidate in the state of New York, Liberty]
has recently signed the Taxpayer Protection Pledge. Faulkner is running APR 05, 2010 03:59P.M.
in New York’s 15th district, which is represented by...
By Mark A. Calabria

While considerable attention has rightly focused on the failure of

FISCALLY CONSERVATIVE BLOG FEEDS President Obama’s various mortgage foreclosure plans to actually lower
the rate of foreclosures, few have bothered to even ask whether the plan
People Are Gaming is allowable under the TARP statute.

RomneyCare [The Club for
Growth]
APR 05, 2010 04:11P.M.
People respond to incentives, so when the law forces people to buy health
insurance, they to pay the monthly penalty of as much as $93 imposed
under the state law for not having insurance, than to buy the coverage
year-round. This is also the case under the federal health care overhaul
legislation signed by the president, insurers say.
Alex Pollock at AEI first raised this issue during testimony before the
Congressional Oversight Panel. Alex point is that TARP only allows the
modification of mortgages that are actually acquired by the government.
Recall the original purpose of the TARP was to buy “troubled assets”. In
managing those trouble assets, Congress required the executive branch
to come with a plan to assist the borrowers underlying those troubled
assets.
Apparently unlike the Treasury department, I believe we should go back
to the language of the statute in determining what it allows or doesn’t
allow. Section 110(b)(1) is quite clear: “to the extent that the Federal
property manager holds, owns, or controls mortgages, mortgage
backed securities…” No where else in the TARP is there any other ability
to establish a mortgage modification program. In using TARP funds to
pay for modifications of loans not owned by the Federal Government, the
Obama Administration is acting far outside of its legal authority under
TARP.

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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com
Many, including myself, have criticized the TARP as a massive delegation
of spending power from Congress to the Treasury Department. Such
delegation is, in my mind, clearly unconstitutional. However, even within
such a broad delegation, there are parameters in which Treasury must
act. Treating the TARP as simply a large pot of money to spend however
they choose is nothing short of illegal.
FISCALLY CONSERVATIVE BLOG FEEDS
Obamacare’s Taxes on Working
Families [Americans for Tax
Reform]
APR 05, 2010 03:25P.M.
New Health Law Raises Taxes on Families Making Less than $250,000
by Billions of Dollars Individual Mandate Excise Tax (Jan 2014): St...
FISCALLY CONSERVATIVE BLOG FEEDS
Strategic Terrorist Interrogation
[Cato at Liberty]
APR 05, 2010 03:21P.M.
By David Rittgers
The cover story of this month’s National Interest focuses on different
approaches to terrorist interrogation. Matthew Alexander, former senior
military interrogator and author of How to Break a Terrorist: The U.S.
Interrogators Who Used Brains, Not Brutality, to Take Down the
Deadliest Man in Iraq, profiles Colonel Tito Karnavian, the chief of
intelligence for Detachment 88, Indonesia’s premier counterterrorist
force. Karnavian’s approach to interrogation is strategic, as opposed to
the tactical scenarios that dominate the debate in America.
The goal of the interrogators is not intelligence information
that can prevent future terrorist attacks, but the conversion of
the extremists into advocates against violent jihad.
Interrogators have, de facto, become the primary facilitators
of rehabilitation. In this manner, Karnavian has turned a
tactical weapon into strategic leverage, and the results speak
for themselves.
Following the implementation of Karnavian’s interrogation
strategy, Indonesia did not have a terrorist bombing for
almost the entire three years between 2006 and 2009, no
doubt chalked up to the cooperation of numerous imprisoned
extremists. Two former senior JI members captured by
Detachment 88 have since written books admitting their
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6 April 2010
erroneous violent beliefs. One book was a national best seller
in Indonesia. In comparison, U.S. interrogation strategy,
although improved since the revelations of torture and abuse
at Abu Ghraib in 2005, is in the Stone Age.
Read the whole thing.
FISCALLY CONSERVATIVE BLOG FEEDS
Obamacare and Taxes: The
Final Tab [Americans for Tax
Reform]
APR 05, 2010 02:38P.M.
New Health Law Raises Taxes on Working Families By Over $500 Billion
Individual Mandate Exci...
FISCALLY CONSERVATIVE BLOG FEEDS
Slippery Slopes and the New
Paternalism [Cato at Liberty]
APR 05, 2010 02:01P.M.
By Jason Kuznicki
At Cato Unbound this month, economist and Cato adjunct scholar Glen
Whitman discusses “soft” paternalism — the attempt to manage
consumers’ choices in such a way that their “real” preferences come
forward.
One often-cited example takes place in the cafeteria: Put fruit and
healthy snacks up front, and people will be more likely to choose them.
Put the chocolate cake first, and that’s what they pick instead.
Paternalism, the argument runs, lies on a continuum, and some forms of
it are really quite harmless. It’s not (or not only) a boot stamping on a
human face forever. It’s also the nice lady at the cafeteria, who helps you
pick out healthy food. Healthy food is what you really wanted anyway. So
what could be wrong with that?
Whitman, however, turns the argument around a bit: Legislators, too,
suffer from bias. What if paternalistic legislation proves sort of like that
chocolate cake? By placing it up front, and by making it look appealing,
legislators may choose it too often, and they may neglect the healthier —
but to them less appealing — choice of freedom. What if a little
paternalism now turns into a lot of paternalism later? And where are our
“real” preferences, anyway? Whitman offers arguments for why a
slippery slope may very well exist here, and examples of how the theory
of soft paternalism has developed teeth in practice.
Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com 6 April 2010

Joining him later this week will be noted economists Richard Thaler, FISCALLY CONSERVATIVE BLOG FEEDS
Jonathan Klick, and Shane Frederick, for a discussion that should last
through the next couple of weeks. Be sure to stop by often and see it On Tonight’s Kudlow Report
develop.
[Larry Kudlow’s Money
Politic$]
FISCALLY CONSERVATIVE BLOG FEEDS APR 05, 2010 12:56P.M.

Unions and Government Debt

[Cato at Liberty]
APR 05, 2010 01:59P.M.

By Chris Edwards

In a recent bulletin, I argued that public-sector unions impose various

costs and burdens on state and local governments. Here is some more
This evening at 7pm ET:
evidence.

The chart below shows a scatter plot of the union shares in state/local
KUDLOW 101: ECONOMIC RECOVERY SIGNS
government workforces and state/local government debt levels as a
share of state gross domestic product. Each blue dot is a U.S. state.
SELL BONDS, BUY STOCKS? … DOW 11,000? … IS THE
ECONOMY STRONGER THAN YOU THINK? ... IS INFLATION
The variables are correlated — as the union share increases, a state tends
A THREAT?
to have a higher government debt load. The chart shows the fitted
regression line in pink dots (R-square=0.27; F-stat=18; t-stat on the
- Art Hogan, Jefferies Global Strategies Director
union share variable=4.2).
- Matt Miller, Wealth-X Chief Research Officer

The correlation is likely caused by the fact that unionized government

EYE ON THE TIGER
workers are powerful lobby groups that push for higher government-
CNBC’s Darren Rovell reports from Augusta, Georgia.
worker compensation and higher government spending in general.

U.S. DELAYS DECISION ON CHINA CURRENCY POLICY

(Thanks to Amy Mandler for data help and Andrew Biggs for
NBC’s Steve Handelsman reports.
suggestions. Andrew’s work on state debt is here).

CHINA CURRENCY: DID WE AVERT A TRADE WAR? IS THAT

BULLISH?

- Andrew Busch, BMO Capital Markets; CNBC Contributor

- Alan Tonelson , US Business & Industry Council

TEA PARTY MOVEMENT’S “CONTRACT FROM AMERICA” …

REVOLT AGAINST BIG GOV’T SPENDING: WILL THIS PLAY
A ROLE POLITICALLY?

- Ryan Hecker, Tea Party Patriots National Coordinator

Please join us. The Kudlow Report. 7pm ET. CNBC.

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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com
FISCALLY CONSERVATIVE BLOG FEEDS
Washington Prospers While
America Suffers [Cato at
Liberty]
APR 05, 2010 11:22A.M.
By Daniel J. Mitchell
Unemployment in the heartland may be high and incomes may be
stagnating in most of the nation, but Washington, DC, continues to be an
oasis of prosperity as more of the nation’s resources get consumed by
government. The latest evidence comes from the Washington Post,
which reports on the federal government’s insatiable demand for more
real estate.
Evidence of the federal government’s growing influence on
Washington area commercial real estate is illustrated in big
deals it is working on both sides of the table: auctioning a
127,000-square-foot Bethesda building previously occupied
by the National Institutes of Health and moving to snatch up
vast spaces in buildings on the private market that have been
vacant for months. The General Services Administration is
seeking to unload the 10-story building that the NIH vacated
in 2002 when it consolidated offices into other buildings in
Bethesda. The recommended opening bid for the online
auction, which runs from April 30 to July 2, is $14 million. At
the same time, federal leasing activity is expanding, according
to Jones Lang LaSalle, the real estate firm representing the
government. The government signed deals for 750,000
square feet of space in the District in the first quarter of 2010,
compared with 670,000 square feet in the city for all of 2009.
It’s hard to pick out the most depressing part of the article. Signing
leases for more space in the first quarter of 2010 than in all of 2009
might be at the top of the list. That is presumably a good (and
discouraging) measure of the growth of government. But for those who
enjoy reading about incompetence and inefficiency, the government’s
eight-year (and counting) project to sell one office building may be at the
top of the pile.
The GSA decided to sell the 46-year-old former NIH building
at 7550 Wisconsin Ave. in Bethesda eight years ago. “We have
a process we have to go through before we sell a building. We
have to offer it to homeless housing, to local government,”
said Bob Peck, commissioner for the GSA’s Public Buildings
Service.
More discouraging factoids include a six-figure increase in the number of
bureaucrats (just in the DC area), and the fact that the government is
going to squander huge amounts of money on green renovations, which
will require taxpayers to cough up lots of money for the contractors
doing the work and for five-year leases (which probably means ten,
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6 April 2010
knowing the sloth-like pace of government work) so the bureaucrats can
be housed elsewhere during the work.
Expansion of the government’s role in the nation’s financial
markets, increased defense spending and the new health-care
law are driving its demand for more space. The government is
expected to increase its Washington area payroll by as many
as 100,000, according to Partnership for Public Service, a
nonprofit group that helps the federal government find
workers. “The government spent 2009 planning for the
growth. We’re going to see the growth materialize in 2010,”
said Scott Homa, research manager for Jones Lang LaSalle.
The government also is overhauling many of its buildings,
making them energy efficient. As a result, several agencies
will need to lease space in the commercial market for five
years or so during renovations.
FISCALLY CONSERVATIVE BLOG FEEDS
Bush, Rove, and Limited
Government [Cato at Liberty]
APR 05, 2010 10:25A.M.
By David Boaz
Conservatives Craig Shirley and Don Devine write in the Sunday
Washington Post that Karl Rove’s memoir wrongly depicts Rove and
President George W. Bush as conservatives. “Big-government
conservatives,” maybe, Shirley and Devine say. But not actual
conservatives. After all,
From William F. Buckley Jr. to Barry Goldwater to Ronald
Reagan, the creators of the modern conservative movement
always taught that excessive concentration of power in
government leads inevitably to corruption and the
diminution of personal freedoms….
Modern American conservatism has roots in the ideas of
philosopher John Locke, the founding fathers and the notion
that humans’ natural state is freedom.
But Bush? He imposed strict new federal regulations on local schools
and massive new costs through his prescription drug entitlement. Not to
mention
steel tariffs, the creation of the Department of Homeland
Security, the McCain-Feingold campaign finance law, a
massive agricultural subsidy bill, and other spending and
regulatory moves by the Bush administration that tilted
power toward Washington and away from individuals and
states.
Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com 6 April 2010

All too true. And a point made many times by Cato Institute analysts. But
Shirley and Devine could have gone further. Policies that “tilted power
toward Washington”? How about the attempt to nationalize marriage
law, for 200 years a matter reserved to the states? Or the Republican
legislation to move the Schiavo family’s tragedy out of Florida courts and
into federal court? Or they could have mentioned an administration with
a vision of the Constitution that included “a president who cannot be
restrained, through validly enacted statutes, from pursuing any tactic he
believes to be effective in the war on terror; [and] who has the inherent
constitutional authority to designate American citizens suspected of
terrorist activity as ‘enemy combatants,’ strip them of any constitutional
protection, and lock them up without charges for the duration of the war
on terror— in other words, perhaps forever.”

The Post gave Shirley and Devine only half a page — far too little to
enumerate all of the Bush administration’s assaults on limited,
constitutional government. But they’ve done a service in reminding
conservatives that this was no conservative administration.