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OpenMarket: October 2012

  • Dodd-Frank's Democratic Dissenters -- From Brian Schweitzer To Debbie Wasserman Schultz

    October 16, 2012 4:36 PM

    "For some reason, some Republicans in Congress are still waging an all-out battle to delay, defund and dismantle these commonsense new rules." That was, in a recent weekly address, President Obama's all-or-nothing defense of the 2,600-page Dodd-Frank financial "reform" rammed through Congress just after Obamacare in 2010. Yet, almost by the day, members of the president's own party are coming to realize Dodd-Frank is actually toughest on smaller financial institutions while institutionalizing too-big-to-fail for large ones.

    Take this exchange last Friday on HBO's "Real Time With Bill Maher," not a place where you expect a conservative 0r libertarian critique on regulation. Certainly not from a Democratic officeholder.

    Yet listen (at 37:55; HBO subscription required) to the  the exact words of Montana's outgoing Democrat Governor Brian Schweitzer on the show:

    Banks that actually did their job like in Montana – where we didn’t have banks go upside down,  because they made you bring your financials in and they’d only loan you money if they understood your business plan – now, they are the ones that are being penalized. They now have more regulation on them, and it’s more difficult for them to make the loans.  The very banks that were doing their job are having a tougher time because of the banks that are too big to fail.

    Fellow panelist Rep. Darrell Issa (R-Calif.), there to represent conservatives, replied with a grin to Schweitzer, "I knew there was something I liked about you."

    Yet, remarkable as his words were in such a prominent liberal venue, Schweitzer is far from the only community banking advocate, and not even the only Democrat, criticizing Dodd-Frank's provisions. As real estate columnist Ken Harney writes in Inman News, the proposed  regulation implementing Dodd-Frank's Section 941, which stringently defines criteria for a "qualified mortgage" -- criticized in the first debate by Mitt Romney --  also has attracted opposition from "bipartisan groups of 160-plus members of the House of Representatives and 40  members of the Senate."

    On the regulation, now being revised by the Consumer Financial Protection Bureau (CFPB) -- and causing great uncertainty in the mortgage market as the final rule has been delayed until 2013 -- Sen. Kay Hagan (D-N.C.) stated at a press conference, "The strict, inflexible restrictions proposed by banking regulators could put home ownership out of reach for many credit-worthy American families." To illustrate the diverse opposition to this rule, Hagan and other lawmakers were flanked not just by groups representing banks and credit unions, but also by groups such as the NAACP and National Urban League, who stood united in opposition to the rule as drafted.

  • Today's Links: October 16, 2012

    October 16, 2012 1:34 PM


    CHARLES LANE: "Liberals’ green-energy contradictions"
    "Al Gore is about 50 times richer than he was when he left the vice presidency in 2001. According to an Oct. 11 report by The Post’s Carol D. Leonnig, Gore accumulated a Romneyesque $100?million partly through investing in alternative-energy firms subsidized by the Obama administration. [...] As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy — or liberalism as a philosophy of distributive justice."

    RICHARD RAHN: "Tax-raisers lack compassion"
    "Many advocates of increasing taxes acknowledge that higher taxes, particularly on labor and capital, will slow economic growth, but they claim 'the government needs the money.' Part of the mistake they are making is treating tax revenue as a constant function of the tax rate rather than a variable that is dependent on the size of the economy."

    DECLAN MCCULLAGH: "Verizon draws fire for monitoring app usage, browsing habits"
    "Verizon Wireless has begun selling information about its customers' geographical locations, app usage, and Web browsing activities, a move that raises privacy questions and could brush up against federal wiretapping law. "

  • Canadian Government Official Calls Anti-Abortion Speech Illegal "Bullying"

    October 16, 2012 5:00 AM

    Bullying has been defined by opportunistic politicians to include a broad range of speech, including core political speech. The latest example is anti-abortion advocacy:

    Ontario’s Education Minister has apparently declared that Catholic schools can no longer teach that abortion is wrong.

    Laurel Broten, who serves under Liberal Premier Dalton McGuinty, said Wednesday that Catholic schools are barred from teaching this core moral belief because Bill 13, the government’s controversial “anti-bullying” law, prohibits “misogyny.”

    “Taking away a woman’s right to choose could arguably be considered one of the most misogynistic actions that one could take,” she told the Canadian Press. “I don’t think there is a conflict between choosing Catholic education for your children and supporting a woman’s right to choose.”

    After people raised objections to this assault on free speech, the Education Minister doubled down on her support for censorship:

    “We do not allow and we’re very clear with the passage of Bill 13 that Catholic teachings cannot be taught in our schools that violates human rights and which brings a lack of acceptance to participation in schools,” she said. …

    Asked for clarification she said again: “Bill 13 has in it a clear indication of ensuring that our schools are safe, accepting places for all our students. That includes of LGBTQ students. That includes young girls in our school. Bill 13 is about tackling misogyny, taking away a woman’s right to choose could arguably be one of the most misogynistic actions that one could take.”

  • Mother Nature And Good Luck, Not Big Government, Saved General Motors... For Now

    October 15, 2012 1:21 PM

    There are lots of claims that the federal government saved the American auto industry by bailing it out. (Never mind that Ford didn't get a bailout, and "foreign" companies such as Honda and Toyota make many of their cars in America.)

    Critics of the bailout make the valid point "any company can be kept afloat indefinitely with taxpayer subsidies." They also say the bailouts have resulted in GM becoming politicized and "spending lots of money" on a politically correct car that consumers and car-buyers don't want "because of pressure from Washington rather than demand from consumers" (as even the liberal Washington Post has noted, discussing the GM Volt). But although these criticisms may be persuasive to newspaper editorialists and economists, they will be unpersuasive to an ordinary person in Ohio or Michigan who desperately wants a job, now, and does not care about how that happens or whether it costs taxpayers money. Such people are likely to be grateful for the bailout if no one explains to them that Mother Nature and good luck, not big government, saved the U.S. automakers.

    General Motors never would have recovered as it did if not for the massive Japanese earthquake and Tsunami that devastated its rivals, such as Toyota.  The tsunami so crippled Toyota that GM could regain market share despite the Obama administration leaving GM’s uncompetitive, inefficient work rules and high labor costs largely intact.

    General Motors also benefited from another factor that has often been overlooked: the massive Thai floods in 2011, which inundated and shut down Japanese car-parts factories in Thailand for many months, crippling Japanese automakers’ global supply chains. On Dec. 8, Toyota “cut its profit forecast by more than half after Thailand’s worst floods in almost 70 years disrupted output of Camry and Prius vehicles.” The World Bank estimates the floods did $45 billion in damage to the Thai economy and left half its factories under water for substantial periods. By harming Japanese automakers, the Thai floods gave a huge boost to their competitor, General Motors, enabling it to survive despite the Obama administration’s costly coddling of the UAW union in the bailout, which threatens the automaker with future losses in the billions.

    GM also benefited from good luck -- primarily the huge safety issues and recalls that befell Toyota in 2010. This helped GM and Ford move forward at a time when overall auto sales were rising rapidly. As The New York Times noted in March 2010 "Toyota Motor, estimating that it lost 18,000 sales in the United States last month while its chief competitors enjoyed big gains, introduced incentives Tuesday as it tried to restore consumers’ confidence in its vehicles after three big recalls," as the company "acknowledged that the recalls had hurt Toyota’s ability to attract new buyers." Toyota rebounded after it turned out its vehicles were safe, and that crashes of Toyota vehicles were the result of driver error, except for one crash that resulted from a dealer improperly installing a floor mat.

  • The CDC Thinks You Drink Too Much

    October 15, 2012 12:06 PM

    If you've had twelve alcoholic drinks in the past year, the Center for Disease Control (CDC) considers you a "regular drinker." That's right: twelve drinks in one year. If you're a woman and you've had an average of more than one drink a day, the agency considers you a "heavy drinker." (For men, it's two drinks).

    In a recent Slate review of the new movie Smashed, Jake Blumgart points out the absurdity of these CDC standards:

    The agency’s definition of “heavy drinking”—an average of more than one drink a day for a woman—could make my mom, a wine-with-dinner lady, sound like Cersei Lannister. My personal experiences of doctors scolding against any overindulgence, ever—no matter the weddings, birthdays, or neighborhood dance parties—leave me feeling exasperated and not disposed to consider their opinion.

    Such rigid definitions don’t seem helpful and smack of pathologizing a behavior—drinking with your friends, or even alone in moderation—that has served humanity well since our ancestors settled down for a beer and a bit of civilization. [...]  Overly puritanical government and medical cautions against alcohol consumption, which contrast so markedly with the experience of many, could lead drinkers to totally blow off these recommendations.

  • Today's Links: October 15, 2012

    October 15, 2012 9:38 AM


    DAVID BIELLO: "Can the City that Never Sleeps Forego Nuclear Power?"
    "On October 15, a three-judge panel hears evidence on whether the plant should operate for another 20 years. At issue is Indian Point’s ability to handle the challenges of aging, as well as its cost estimates for dealing with a meltdown. But what's really at stake is whether nuclear power has a future near the Big Apple. The two operating reactors on the site produce roughly 17,000 gigawatt-hours of electricity each year. A new report from the Natural Resources Defense Council argues that this electricity could be replaced nearly for free. [...] But analyses by plant owner Entergy suggest the changeover would come with a hefty bill."

    CONOR FRIEDERSDORF: "Small Town Spanish Life in 1943: 'No Decent Woman Is Ever Seen on a Bicycle'"
    "In Spain, traveling through a cork forest near the Portuguese border, James Michener once stumbled upon a small town in a clearing, where he found posted to the oak door of the church a list of twelve rules. [...] Today clothes-related controversy more often turns on whether Muslim women are wearing too much of it. Seven decades hence, one wonders if the hijab will seem as unfathomable as the church door rules of yesteryear, or if those who would outlaw it will be remembered as small tyrants."

    ELIZABETH WEINGARTEN: "How To Stop Apple's iOS6 From Tracking Your Activity for Advertisers"
    " Apple’s new iOS 6 does, indeed, come with a default setting that tracks your activity, gathering a constant stream of personal data. Apple’s advertising arm, iAd, uses that data to create a targeted, personal ad campaign based on your recent Googling of 'romantic comedies,' that knitting app you downloaded, and the Thai restaurant you checked into last night."

  • CEI's Battered Business Bureau: The Week In Regulation

    October 15, 2012 5:00 AM

    38 new regulations, from amateur rocket operations to the definition of “night.”

  • Obama Administration Imposes Racial Quotas On School Discipline In Oakland

    October 12, 2012 1:20 PM

    Under pressure from the Education Department, which investigated it over "racial disparities" and "disparate impact," the Oakland, California, school system has agreed to impose "targeted reductions in the overall use of student suspensions; suspensions for African American students, Latino students, and students receiving special education services; and African American students suspended for defiance." See Agreement to Resolve Oakland Unified School District, OCR Case No. 09125001, page 14, Section VIII(c)(iii). These "targeted reductions" are racial quotas in all but name. ("Disparate impact" is when a process affects one racial group more than another, despite having no racist motive, such as when whites have higher average scores than minorities on a standardized test.)

    One federal appeals court (in a different region of the country) has said that schools cannot use racial targets or quotas for school discipline, since that violates the Constitution’s Equal Protection Clause. See People Who Care v. Rockford Board of Education, 111 F.3d 528, 534 (7th Cir. 1997). That court ruling also said that a school cannot use race in student discipline to offset racial disparities not rooted in school officials’ racism (so-called “disparate impact”).

    Racial “disparities” or "disparate impact" in student discipline rates are not the product of racism by school officials, but rather reflect higher rates of violence and other disruptive conduct among African-American students. Nationally, "the homicide rate among males between the ages of 14 and 17 is nearly ten times higher for blacks than for whites and Hispanics combined." In the Chicago schools, which used to be headed by Obama's own current Education Secretary, "25 times more black Chicago students than white ones were arrested at school," between September 2011 and February 2012.

    The Supreme Court’s Armstrong decision emphasized that crime rates are not the same for different races, and that racial disparities in crime rates and conviction rates are not proof of racial discrimination. Stopping school officials from disciplining black students who violate school rules just because they previously disciplined more black than white students is as crazy as ordering police to stop arresting black criminals just because they previously arrested more blacks than whites.

    Using race in student discipline, the way Oakland has agreed to do, also violates Article I, Section 31 of the California Constitution, which forbids all "racial preferences," regardless of whether they are permitted by federal law.  That includes racial preferences in student discipline. (This provision, known as Proposition 209, was upheld by the federal appeals court with jurisdiction over California, in Coalition for Economic Equity v. Wilson, 122 F.3d 692 (9th Cir. 1997), and it resulted in the invalidation of many state affirmative action programs in Connerly v. State Personnel Board.)

  • Today's Links: October 12, 2012

    October 12, 2012 9:53 AM


    PETE PETERSON: "Should Romney Seek the Public Sector Vote?"
    "At first blush, the headline on the Government Executive websiteseems unsurprising: 'Poll: Obama leads Romney among government workers.' The article quotes Rasmussen Reports, which found that of the public sector employees polled, 54 percent said they would vote for President Obama, while 37 percent said they would vote for Republican challenger Mitt Romney. But a deeper look into the responses gives a sense of the size of this demographic, and demonstrates why the Republican ticket should take government workers seriously if they want to win."

    WILL OREMUS: "Reddit Moderators Ban Gawker In Solidarity With Creepy Porn Purveyor"
    "I find it very difficult indeed to understand how you can be so concerned with Violentacrez’* privacy and so thoroughly unconcerned with the privacy of the young girls and women whose photographs he propagated on the site.[...] Indignant Reddit users' party line is that the women unwittingly featured in r/creepshots had no expectation of privacy, because they were presumably in public when the photos were taken. Thus, there’s nothing illegal about the photos—whereas Chen’s plan to write a story exposing Violentacrez was blackmail. Or something."

    SCOT W. ATLAS: "What Do Actual Doctors Think About Obamacare Now?"
    "[C]ontrary to those doctors selected to legitimize ObamaCare in the staged media event (where the White House actually handed out white lab coats to generate the image of official credibility), an overwhelming 70 percent of doctors said, even back in 2011, that they disagreed with the AMA’s position on health reform, while only 13 percent agreed with it.  In fact, almost half of doctors in that survey even went so far as to say that the AMA stance on ObamaCare was the factor causing them to drop AMA membership."

  • The Missing Transparency: Where's The Unified Agenda?

    October 11, 2012 3:15 PM

    When it comes to government transparency, it is essential to throw at least some sunlight on the problem. Over at the Daily Caller, Wayne Crews try to do just that:


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