Exposed: Democrat Dirty Tricks in Olympia

The Seattle Times reports today that the Public Disclosure Commission has reported that there is "no evidence" that in 2008 Dino Rossi in any way coordinated his campaign with the election spending of the Building Industry Association of Washington and that the claims against him and their timing were, clearly, politically motivated.

The Times: "when either party abuses the public trust it should be called out. This was a case of the Democrats abusing the legal and regulatory process, not once, but several times."

I couldn't have said it better myself.  I only wish the paper could have dug a little more to determine who was behind the strategically timed dirty trick.  Presumably King County Superior Court Judge Paris Kallas was in on it, at least implicitly, since with no evidence at all she approved the Rossi deposition to be scheduled days before the election.  Kallas certainly should not be re-elected, but how much further does this go?

Well at the very least it's fair to presume that the claimants (Washington legal insiders Robert Utter and Faith Ireland) and their attorney, ambulance chaser Mike Withey were in on it.  But they're essentially tools, apparatchiks with little to lose. 

Wouldn't it be surprising if Christine Gregoire and her 2008 campaign manager Kelly Evans knew nothing about this?

The Mom Rule of Constitutional Interpretation

Today the Seattle Times came out defending Attorney General Rob McKenna joining Florida's lawsuit over the healthcare bill.  They pointed out that Florida is footing the bill and that if you take a step back for a second it does seem kind of crazy that the healthcare bill is an expression of Congress's power to "regulate commerce."  Kudos to them for being fair. 

I would suggest here a principle of constitutional hermeneutics.  If you interpret a clause in such a way that you could not with a straight face explain your interpretation to your mother or your 4th grade English teacher, then you have gone too far.

Do you want to tell your mom that you believe that the right to "regulate Commerce...among the several States" includes the right to force every citizen to buy insurance?  I don't, brother.

Fantasy is easier to sell than truth -- in the short term

To the Liberal Democrat, history is always in the midst of an incomplete progression toward a utopian end.  History is a story with a happy ending and we are all always making progress through that story.  In the fullness of time, with occasional and minor setbacks caused by ignorance, we will achieve, in the Liberal view, a society where all needs are met equally for everyone, where there is no lack and no unfairness.  In the end our long struggle will bring into existence the kind of perfect society humans have been fighting for and dreaming of forever. 

To the conservative, there is no perfect society but the United States of American pretty much is about as close as we’re going to get to the society humans have been fighting for and dreaming of forever.  The culture and economic success of the United States of America are precious and unique achievements that must be protected from destruction by those who do not understand what makes them precious and unique.  Two of the most important characteristics of this culture are individual freedom and opportunity.  To the extent we can use new tools and theories to better secure these or to improve our lives in other ways, we should, but above all else we should safeguard this unique American life. 

To accomplish Liberal goals it is important to keep expanding, in George Will's phrase, "the network of dependency" (on government) and essentially keep voting new gifts to people while taking a larger and larger share of money away from the people who, in an above average way, contribute to and earn money from the economy.

To accomplish Conservative goals we need to above all prevent anyone with bad ideas from messing up the system.  And secondly, we need to make things even better where we can without messing up the underlying goodness.

It is harder to get people to vote for a Conservative platform because it is, obviously, not as full of goodies.

Now, that said, Conservatism does have certain advantages.  The main advantage of Conservative policies is that they work.  The qualities of individual opportunity and liberty are so psychologically important to humans that when you remove them from a society, things tend to go quite poorly but when you design an economy and political system taking them into account, things can go quite well. 

I hope we can make this case well enough that we don't need to learn the lessons of Liberalism and of the late 1970s again the hard way.

Obama in 2012: Either an Idiot or a Genius

By getting his bill passed, Obama has avoided the debilitating fate of being perceived as an inexperienced incompetent who wasted America's time.  He should be delighted that it passed, and he is. 

Many clever ruses were employed not only to get the bill passed but also to optimize the bill’s impact on his and his party’s electoral success, not least of which is pushing much of the tax pain until after the next presidential election.  I have to say, that was brilliant.  You have to give David Plouffe some credit.  I wish he was on our side, except that I wouldn’t want anyone that dishonest on our side.

Here is the major ramification: the 2012 election, one way or another, will now not be particularly close: Obama will be, by then, either an idiot or a genius.  If the economy keeps going despite Obama’s massive new deficits, then Obama will win easily.  It will not be close.  The objection to a massive new entitlement or a massive stimulus bill is that it is too expensive and will therefore hurt the economy.  So if the economy goes sour the Dems will pay the price.  But if the economy does not and it turns out that the system can, in the end, support more spending and larger deficits, then Obama wins. 

The Democrats complained about Reagan’s deficits.  Kennedy, Carter, Mondale, Lester Thurow, Pat Schroeder and Howard Metzenbaum predicted that Reagan would ruin the economy.  The Reagan administration set the economy on a course for multiple decades of prosperity and now Reagan is a genius, no one has heard of Howard Metzenbaum and Lester Thurow is a nobody. 

In theory, the government can only borrow so much.  If it borrows too much, then there is nothing left over for corporations to borrow so the economy goes bad.  Or if that doesn't shut things down global financial markets may lose faith in the ability of the government to repay its borrowings, which will drive up interest rates and depress the economy.  If the government tries to avoid its debts by devaluing its currency, it will lead to inflation.  By whatever theory you like, there is a point at which you have borrowed too much.  Just ask Greece.  The trouble is that no one knows where that point is.  Paul Krugman doesn’t know.  Paul Volcker doesn’t know.   Alan Greenspan doesn’t know.   

Similarly, there is some point at which taxes are too high and people lose incentives to work and invest.  So the economy goes bad.  We’re not sure when that happens either or how to measure its exact effects, though there is a general notion that we probably reached that point under Jimmy Carter and that the UK definitely reached that point pre-Margaret Thatcher.

But the bottom line is that no one can exactly predict the economy's tolerance for high taxes or high deficits.  Chloride is a caustic chemical that can be used to make poison gas.  But if you put it together with Sodium to make salt, then in reasonable quantities it makes our food taste great.    At this point with respect to major economic phenomena, no one knows what "reasonable quantities" are but we are making some major, and some would say (count me among them), unnecessary bets as to what they are not. 

The key is that everyone is on the record.  Obama and Krugman are on one side saying that the proposed deficits and necessary taxes (which have not been fully specified) can and will be fully compatible with a successful economy.  The Republican Party says they are incompatible.  We will find out soon enough.  If things go well it will not be a defense to say that whether it went well or not it was an unnecessary risk at a bad time to take an economic risk.  If everything works out, no one will care about that. Obama and Krugman will be geniuses.

But if things do not go well and this blows up in our collective face then Obama is Carter 2.0.

The best thing I've heard about the health care bill

From Cynthia Lummis on Twitter (@cynthialummis): Pelosi wins, American loses.

A Guide to Local District Party Meetings and A Brief Record of Saturday's 46th District Meeting

Taking a break from healthcare for a minute.  Spent my Saturday morning at the 46^th District Caucus.  Have you thought about going and wondered what local party meetings are all about?  Well I’ve been to several now and here’s how it works. 

Mostly, they’re formally structured events focused on a particular bit of business, usually electing some subset of the group to be delegates to a county assembly or some such.  Sometimes there is also a speaker, usually a candidate , who will make a speech, but usually not.  Sometimes the two activities are combined, as in: “we’re going to hear our speaker and then we’re going to elect delegates to the county convention.”  That covers the typical agenda.    It usually takes place in the basement of a church, or in the gym of a school, and lasts about an hour. 

The meetings follow Robert’s Rules of Order, which many people seem to be quite expert in, so there is much discussion of “motions” and “seconds” and “amendments” and so on.  This aspect gets quite pedantic, but serves to keep the meeting on topic and to make sure things don’t get wildly out of hand. 

Though open to all Republicans, the meetings are generally small and the attendee profile skews to Retirees, who probably have a bit more time to deal with local party administrative matters now that they’re not dealing with kids and work.  There is also usually a little group of Activists.  The Activists often have an eager glint in their eye and want you to sign something.  Then there are usually one or two newcomers attending their first District level meeting, mostly there out of curiosity and looking a little confused.  Finally, there are the party Veterans who actually manage the day to day rubber meets the road workings of the party.  This local organizing function can be very important in getting out the vote and is handled by some very dedicated people.  In the 46^th District of Washington, this role is for true optimists since we haven’t had an elected Republican since 1983!   But you can count me as one of the optimists, too.

The elections are generally not heavily contested.  Basically, the Chairman has usually identified who should be on the committee (or whatever it is) and that person is usually approved.  So the process is often somewhat formal and perfunctory, like many corporate annual meetings if you have ever been to one of those.  The tension of these events, if there is any, is that a lot of Newcomers come hoping to find a debating society and others, the Activists, are looking to make political news by getting the District Caucus to formally adopt some sort of political motion endorsing their group’s views.  So usually toward the end of the meeting the Activists make a motion to try to consider a resolution, which they have written up for the occasion.  To understand the tone of these resolutions by the way, you have to imagine combining a somewhat fringy agenda, verbose and coded verbiage, and an air of determined pointlessness since nothing done at the District level actually matters except the election of representatives to the County level. 

So the “excitement” is that the Veterans want to do the official business and get out of there without embarrassment and the Activists want to make resolutions.  The Newcomers are often the people in the middle whose votes are necessary to save the District from the embarrassing proposal of the week. 

At yesterday’s 46^th district meeting in particular, the main business was to elect 20 delegates and 10 alternate delegates to the State Convention in Vancouver in June.  In a written document distributed to everyone in attendance, Chairman Bob Guthrie endorsed 11 people who had been helpful to the party.  Then nominations were taken from the floor such that we wound up with 25 candidates for 20 spots.   The Chair’s candidates had a major advantage (they were all voted in) so the real issue was over the remaining nine spots.  Each candidate who was present spoke for about 30 seconds, usually saying where they live or what they do or just saying their name and talking about their previous party involvement.  No one really said anything ideological or very political.  One woman basically just said that she was 100% Irish -- and she got elected!  It’s funny how these things work, I guess. 

While the party Veterans counted the votes, former State Senator George Scott said a few words recalling a bit of the 46^th District’s history.  That was actually quite interesting, and I have started to read his book about Washington state politics, A Majority of One: Legislative Life. 

Ralph Kosche, who is the District’s representative to the party platform committee, also said a few words and encouraged people with platform recommendations to email him but unfortunately I can’t remember the email address.  It was something like 46thgopplatform@gmail.com.  But I’m not sure.  If anyone remembers, please let me know!

When the votes were all counted, we had 20 delegates and 10 alternates.  I was the #1 alternate.  Yes, number 1! 

At the very end, the Activists won a (very) modest victory, getting the group to adopt a resolution basically restating the 10^th Amendment.     

I do feel that perhaps things could be improved in two ways.

First, there should probably be some way to help people get informed about things that are going to happen in the meeting.    So if there is going to be a resolution considered it should be available at a web site.  If we’re going to elect representatives, maybe they should have to say something about themselves online.  What the District representatives do at the state convention is vote on the platform mainly.  So it would be helpful to know whether a given representative is a middle of the road Slade Gorton Republican or a Reaganite or a Glenn Beck Tea Partier.  Coming out of yesterday’s meeting, there is no way at all to know what the representatives believe.  So they may or may not really be representative of anything.  That can be improved. 

Second, maybe local party enthusiasts should have a debating society if that’s what some people want.  There should be a website where people can voice their opinions and which is unofficially associated with the District. 

Hey look.  I just created one, a Google Group called Unofficial WA GOP 46th District Discussions.  Maybe that will be helpful. 

Would Exile Be Cruel and Unusual?

Why do we have prisons in the US?  I mean jails sure, to hold overnight drunks and such, but why prisons to hold people for long periods of time?  We spent $68 billion on prisons and jails last year.  There has to be a cheaper way and, if we have to waste money somewhere, why waste it here?

What if we sent people to prison in Mexico?  Or Gambia?  I am sure Mexico and Gambia would be happy to build prisons to our specifications, treat our prisoners as we require under the terms of a contract, open their prisons to inspections, etc.  And I am sure we could cut costs by 50% at least. 

For a lot of convicts, we might not need to send them to prison at all.  What if we just said that for certain crimes the punishment is exile from the United States, for a period of time or for life?  You can live wherever you want, but not here. 

We could make a deal with countries to send convicts there.  We would have a treaty with the receiving countries establishing a minimum standard of treatment for exiles.  Exiles would get citizenship in the new country. 

This would cost something.  We might have to pay Gambia or New Guinea or whomever $100,000 per convict or so.  But we would save a lot of money.  We probably spend that in a single year housing and guarding each convict. 

Is this cruel?  Is it unusual?  Well, it’s certainly not historically unusual.  Exile is a traditional punishment going back to the ancient Greeks. 

Is it cruel?  Well, compared to what?  Compared to being in prison for ten years?  I am not sure it is crueler than that.  That’s pretty awful.  And I bet exiled convicts would more often abandon crime than people who go to US prisons.  US prisons are great places to meet other criminals and learn from them.  Sometimes what you need is to get away from it all. 

Leaving Fantasyland, Please Return Your Rose Colored Glasses

What if we had household elections? Every two years, someone could run for CFO. The CFO would decide how we spend and make our money. People would, in running for office, make speeches, perhaps after dinner, about trips to Maui, a new Mercedes, a new house in Fantasyland and higher allowances for the kids. Another candidate might run suggesting we get a house in Realityland and live more modestly. The Fantasyland candidate would criticize this candidate as being pessimistic, cheap and probably lacking in human kindness. The most optimistic candidate would win a lot because people love to hope for great things.

Politicians, especially Democrats but really almost all mainstream politicians today, are Fantasyland candidates. They love to hope for great things and they love to make big promises. And they love to get elected!

Unfortunately, great things don’t always happen, or sometimes the future turns out not to be as crazy awesome as we had hoped. Many of our past expectations about the present were based on a vision of a crazy awesome economy. Oh well. Our heart was in the right place.

The trouble with the Fantasyland candidate is that the family that elects him or her winds up poor. After a few fun years they spend themselves into debts they can’t pay. They wind up worse off than the Realityland candidate family.

Politicians, when they create a government program, do not really know if it will be affordable. They don’t know what it will cost in the long run and they don’t know what the economy will be like then either. It is up to voters to be vigilant and work to terminate or reduce the scope of programs that force us to spend more than we can afford, even on appealing items. That can be unfun (we would like to be the type of family that goes to Maui every year), but it is necessary.

We Americans need to move to Realityland. To do this, we need to be more skeptical of the promises of political candidates, and we need to reverse the Washington budgeting mindset. Today, in Washington we determine what we need to spend and then figure out what taxes should be. That way taxes always go up because there are always cost over-runs. This doesn’t work because there is no end of awesome sounding programs politicians can think of, just as there is no end to the ideas we could come up with to spend our own personal money.

The way it should work is that we figure out what tax rate is reasonable for the product called Government. Then we figure out how we are going to spend the money we actually expect to get. By definition under such a system there would be no such thing as “mandatory” spending. All spending commitments would be made on an “assuming we can” basis.

We should agree on a reasonable tax rate and structure that allows for economic freedom, incentives to work and a private economy. We should agree that the federal government budget must be balanced every year. And then we should spend only the money we receive. The tax code should rarely change.

If you and I agreed to take that trip to Hawaii every year, we might find we can’t really afford it. In that case, we would change plans. Would we be disappointed? Of course. But that’s reality. We would adjust.
Today, the federal government spends $33,000 for every household. The average household makes $50,000. Does $33,000 seem like a lot to you in that context? Does that seem reasonable? Not to me. It seems pretty out of control to me.

What seems reasonable? Hmmm…$18,000 per household? Almost 40% of household income? That seems reasonable, and sustainable, to me.

This would require us to cut current federal government expenditures approximately in half. There would be, necessarily, no sacred cows here and we would have to reduce the size of Social Security, Medicare and the Military.

I loved Top Gun and I am glad we won WWII. But we would have to stop being policeman to the world. Goodbye bases protecting Japan, Korea and Europe. Protect yourselves, guys, and thanks for all the gratitude.

Social Security and Medicare would become safety net programs for the poor, like welfare.

Why would we have to do this? Is it because we hate people? Is it because we’re pessimistic?

It is because it is too expensive to do otherwise. That’s what we have learned in recent years. Sorry. That’s the reality of it all.

A Fix For the Economy: Buy Mortgages Down by 33%

OK.  I have an idea. 

Here’s the problem.  25% of homeowners are underwater on their mortgages right now.  That’s unbelievable.  It’s horrible.  I’m surprised things aren’t much, much worse in the general economy. 

From 1996-2006, home values skyrocketed.  In California they approximately tripled.  In Washington they more than doubled.  A lot of people received the magical gift of massive new equity in their homes.  Let’s look at an imaginary couple, Bob and Sue, who bought a house in 1997 for $500,000, putting down $50,000 and borrowing $450,000.  By 2002, that home could easily have been worth $800,000.  Bob and Sue were worth $50,000 when they bought the house, plus their cash on hand, investments if any and, let’s say, an IRA.  Suddenly, they had $350,000 in their house (plus their cash on hand, investments if any and their IRA).  We’re rich!  We’re rich! 

Bob and Sue could borrow against their new equity, refinancing their $450,000 mortgage into a new $750,000 mortgage, giving them $300,000 in cash after they pay off the old mortgage.  Times a million couples in the US, that bought a lot of vacations, remodels, cars, evenings out, feel good contributions to the Sierra Club, espresso machines and snazzy new outfits.  Good times.

Now the market has changed.  Bob and Sue’s home is worth let’s say $550,000.  Oops.  They’re way underwater.  Not only is there no more money available in the refinancing well, but their “net worth” is negative (and plus -- their jobs are less secure in the new economy).  Yikes.  It’s a financial nightmare.  People living financial nightmares usually aren’t in the mood to spend. 

Bob and Sue’s situation is common.  It’s easy to see why consumer spending, which is 70% of the economy, declined.

It’s also easy to see why banks aren’t lending very much, despite the TARP money.  Firstly, Bob and Sue are not going to be inclined to borrow any time soon and their credit rating is horrible anyway (even if they haven’t missed payments, they’re overleveraged).    Beyond that, the value of real estate is now perceived, rightly, as insecure. Lending now against real estate is like catching a falling knife.  Banks can hope we’re at the bottom, but what if we’re not?  What happens to the bank’s money then?  Will there be TARP money to save them again if the market goes down another 30%?  Maybe yes, maybe no, right?  So banks are reluctant to lend and if they do, they want 33% down, not 5-10% down.  The only entity doing any mortgage lending these days is the federal government.  Banks won’t lend until the economy is looking good. 

OK so we’re basically hosed, right?  Bob and Sue feel poor.  They are either going to walk away from their house and destroy their credit rating, in which case they won’t spend, or they will continue under the burden of their inflated mortgage, in which case they also won’t spend.  If real estate appreciates at 3.5% per year going forward, Bob and Sue will have $50,000 of equity in their house again in 9 years.  They will feel poor that whole time. 

That is bad because despite their foibles, Bob and Sue drive the economy.  Bob and Sue are us.  If they don’t spend, we get the Great Depression II.  Whether you like Bob and Sue or not, it’s in your interest to have them be happy and to have them feeling kind of affluent.  This is the key to our economy.

Today we’re basically like a teenager who had a large drunken party while his parents were away and woke up with his house trashed, his Dad’s car crashed and “IDIOT” written on his forehead in Magic Marker. 

It’s like Barney Frank slipped us a roofie. 

Is there any way to uncrash Dad’s new car?  My idea has its risks, but I think would be better than 9 years of a zombie economy. 

What we need is for Bob and Sue’s mortgage to be $500,000, 33% below its current level of $750,000.  This would restore their $50,000 in equity.  We need Mr. Wolf from Pulp Fiction.  We need to make it like last night’s party never happened. 

Like the solution to so many problems, it can be done but it’s not cheap.  What I propose is that we buy down all residential mortgages in the US by 33%.  Yup, you heard me.  The total value of US residential mortgages is $11.3 trillion.  So this would require $3.8 trillion.  It would not be easy but it would be possible.

At the same time we would have to change the rules around mortgage lending to make sure we never did that again.  We would have to establish minimum credit standards that make it much more likely that if someone borrows against a house, they’re good for it.  This is what most countries do.  Is it harder to buy a house in Italy than in the US?  Yes.  Did they have a crazy mortgage real estate bubble?  No.   (I can’t believe we’re taking economic lessons from freakin’ Italy.  Ugggh.)

Some of this money would be a windfall to Bob and Sue.  Real estate prices might decline as the market became more liquid (more people would sell because they wouldn’t fear a short sale on their house like they do now) but Bob and Sue would definitely benefit.  Is that fair?  Do they deserve it?  Not really, I guess, but at least we get our economy back.