Tuesday, October 14, 2008

Has the Federal Government Lost Its Legitimacy?

Yesterday at a campaign rally here in Virginia Beach, Gov. Sarah Palin stated the following: "There's anger about the insider dealing of lobbyists. Anger about the greed on Wall Street. Anger about the arrogance of the Washington elite." Indeed, there is anger, righteous anger, and it is because Washington is no longer devoted to the public good; it is dedicated to self-promotion and self-preservation, and therefore has lost its claim to legitimacy.

Throwing an accusation at "Washington" is, of course, similar to using a hydrogen bomb when a cruise missile is much more appropriate. Let me, therefore, be more specific. Those congressmen who voted for the "Bail Out Bill," particularly after it was "porked up," have threatened the continued legitimacy of the federal government.

Congress' powers are specified in Article I of the Constitution. Article I contains no specific power granting to Congress the authority to loan money to failing investment houses, or to invest in the stocks of creaking banks, or to buy securities composed of sub-prime mortgages given to poor credit risks. There is no authority granted to Congress in Article I to authorize bankruptcy judges to reduce interest rates on some mortgages, or to reduce principal on others.

The best constitutional "hook" for the Bail Out monstrosity is the first sentence in Section 8 of Article I, which permits Congress to collect taxes and provide for the "general welfare of the United States." Note that Congress is not authorized to provide for just the "welfare" of the United States, but it is specifically limited to acts on behalf of the general welfare. This means, of course, that Congress is not empowered to benefit special interests, but must look to the general welfare of the republic.

Not all financial institutions are failing, and the overwhelming majority of mortgages are being paid on time. Only a few banks and investment houses are failing, and these generally are the ones who through mismanagement made money on the subprime mortgages and are now facing the consequences of their mismanagement. The Bail Out benefits these special investment houses and those borrowers who through greed or sheer stupidity borrowed money when they should not. Benefiting the greedy and dumb, while giving no incentives to the frugal and wise, is not only unconstitutional, it is terrible public policy.

The Bail Out Bill was first defeated in the House of Representatives before being considered in the Senate where pork was added to the pot. The Bill after passing the Senate was then returned to the House where enough members apparently liked the more pork laden "stew" to vote for it. The following tax breaks were in the final bill when passed by the House:

  • $223 million for Alaskan fisherman;
  • $192 million for rum producers in the Virgin Islands and Puerto Rico;
  • $148 million for wool-producing companies;
  • $128 million for manufacturers of car-racing tracks;
  • $10 million for small television and film producers.


How can $192 million for rum producers in the Virgin Islands and Puerto be in the general interests of the United States as required by the Constitution? How can this be equitable without tax breaks for our fine manufacturers of Kentucky Bourbon or Tennessee Mash? How about the producers of gin and vodka, let alone the California wine interests? Why should Alaskan fishermen get a tax break when Washington State fishermen who fish in the same waters do not similarly benefit? Should not cotton-producing companies have the same tax break as wool-producing companies? How can a tax break for manufacturers of car-racing tracks ever be in the general interests of the United States?

Governor Palin's running mate, who purportedly champions the crusade against pork spending, voted in favor of the pork-laden Bail Out Bill. So did his opponent. Both of these self-proclaimed "agents of change" are, therefore, deceptive at best. These presidential candidates and Senator Biden are members of the Washington elite about which people are angry according to Gov. Palin. Senators McCain, Obama, and Biden have demonstrated through their Bail Out Bill vote and their other votes on spending bills that they will continue to favor special interests rather than the general welfare of the nation. Their actions as President, therefore, will continue to threaten the legitimacy of the federal government. Congress, with its justly deserved approval rating of nine percent, will be gleeful accomplices. God help us all.

Sunday, June 29, 2008

Our Biggest Air Polluter

This summer day started off like most others. I got up, looked outside the window and wondered when I had last cleaned that window. Letting the cat outdoors reminded me that I had not been derelict in my window washing duty; the air washing over me from the open door smelled like a neighbor's house on the next block was being consumed by fire. Later that morning, I observed from my home office's hazy front window a couple neighbors walking their dogs while wearing what appeared to be surgical masks. I felt sorry for the mask-deprived dogs.

I was born and raised in Chicago and practiced law there for over 25 years. I lived in a community of about 6 million souls driving millions of cars on endless miles of roads. These cars were accompanied on the roads by buses that, as they accelerated, spewed clearly visible black smoke which you avoided by taking a deep breath and walking quickly across the street. Sometimes in July or August, a high pressure system would invade and occupy the area, causing a stillness in the air and a rise in the pollution index. In all my thousands of days in urban Chicago, and during my trips to places like Los Angeles, I have never experienced the continuing daily level of air pollution which plagues Hampton Roads this summer.

Unlike Chicago or nearby Gary, Indiana, Hampton Roads does not have steel plants with operating smoke stacks or other heavy manufacturing factories which provide good jobs for a hard working middle class. In fact, we lost one of those plants just last year. Rather, we enjoy the bounty of God's creation with our gorgeous Atlantic beaches and the Chesapeake Bay, and the deep harbors on the Elizabeth and James Rivers which allow massive ships to rest safely from their international duties. These natural resources, however, are not in their original state. Rather, earlier generations of Hampton Roads residents improved these ocean fronts and rivers to allow their present use, and these are now actively maintained by us as demonstrated by periodic dredging and beach restoration. This continuing maintenance is necessary to preserve these natural resources on which the tourism of our economy rests. This tourism is clearly threatened by the continuing air pollution we are now enduring (how many tourists will come back next year when they spent most of this year's vacation to Virginia Beach indoors to avoid the smoke?).

We in Virginia are not alone in suffering from smoke inhalation. Fox News reported that the good citizens of Northern California are enduring the effects of 1000 wildfires which have caused the local Air Pollution District to advise everyone in the affected areas to limit outdoor activity, stay indoors and avoid strenuous exercise. Because of the fires, air quality in some counties is approaching the level of "very unhealthy." This exposure to particle pollution caused by the fires can result in "serious health problems by aggravating lung disease, causing asthma attacks and acute bronchitis, and increasing the risk of respiratory infections."

Our current predicament and the travails of our Northern California counterparts remind us that the biggest source of air pollution in the world is Mother Nature. Yes, Mother Nature is not the benign grandmotherly type who coddles us infants and protects us from danger, but rather is often filled with rage and fury that needs taming by man rather than protection to commit more acts of violence.

Our current national environmental policies have certainly contributed to this source of air pollution. It is no accident that most of the wildfires occur in the West, where huge tracts of land are owned by the federal and state governments. It is, moreover, no coincidence that the largest amount of air pollution I have ever experienced in my lifetime is the result of a fire burning for weeks now in the federally owned Great Dismal Swamp (during my days in Chicago, I foolishly thought that swamps were filled with water and would never burn). One wonders, of course, whether this failure by the federal government to protect its land (and the people downwind from the fires) is an omen for the quality of health care if it too is nationalized.

Our misinformed national environmental policy has also contributed to the second plague confronting American consumers this summer, high energy prices. With environmental concerns blocking oil refinery and nuclear power development, energy demand will continue to exceed supply for the foreseeable future causing ever spiraling prices. Given the interaction between energy and all other production, inflation will rise quickly.

Enough gloom and doom. Maybe I'll catch a bus to go to the only place where I can get exercise this summer, the suburban indoor mall. Yes, this product of cheap energy prices and land development appears to be the only place where I can walk without small particulate matter invading my lungs. Contrary to the claims by the environmentalists, maybe land development is not all that bad after all. Whoever heard of a fire burning for weeks on a golf course?

Tuesday, June 10, 2008

Change You Can Really Believe In

As I have watched speech after speech after speech during the last several months (which makes me wonder how the Brits could possibly elect a new leader in only a few weeks), my gaze has often fixed on the sign which appears on the podium and among the dozens of supporters strategically placed behind Senator Obama. Are they, like me, also thinking about change to a smaller and much less expensive government? Are they too thinking about a change for more liberty which necessarily accompanies more individual responsibility? Do they also think about changing the stranglehold of the educational monopoly which stifles our best and brightest students?

Since I suspect that "change" to the Democrats attracted to Senator Obama may be something different than the change I perceive necessary for our country, I (well, not actually me, but rather one of my bright students) did some research on what that omnipresent Obama campaign slogan may mean. We compared the U.S. to the countries the Democrats envy (Canada, Great Britain, France, Germany, and Sweden) to see which areas the Democrats may want to change. One of these areas may be the graduation rate for college students. According to a popular reference book, our college graduation rate of 81% is exceeded only by Canada's 91%. However, when Canada's rate is combined with the graduation rates in Great Britain, France, Germany, and Sweden, the combined rate falls to 54%. This makes the U.S. graduation rate 50% higher than the other industrialized nations which the Democrats envy. Is this one of the changes they want to see, a less educated electorate?

With the economy emerging as the top issue in this election, perhaps this is the area where the biggest change is necessary. According to the Heritage Foundation, the average productivity (measured as GDP per capita) of each American is $41,890. This level is much more than the average per capita productivity of Canadians, Brits, Germans, French and Swedes of $31,797. This means, of course, that the average American is 32% more productive than his northern neighbor or European counterpart (maybe it's attributable to "holidays"?). With this greater productivity, one might think that there is much more unemployment here, but actually the opposite is true. Even with the jump in employment statistics this month, the U.S.'s unemployment level of 5.5% is much lower than Sweden's 6.2%, Canada's 6.8%, France's 9.5%, and Germany's 11.7% (combined with Great Britain's 4.7%, the average of the "envies" is 7.8%, or 41% higher than the U.S. unemployment rate).

With food and gas prices rapidly on the rise, maybe change for the Democrats means lower taxes so people will have more disposable income to pay for increased prices. But alas, it appears that the models to which the Democrats aspire actually take much more money out of the wallets of their people than the government currently takes from ours. The U.S. tax rate (as a percentage of GDP) is 26.8%, which is much lower than Canada's 33.5%, Germany's 34.7%, Great Britain's 37.2%, France's 44%, and Sweden's 51%. The U.S.'s tax burden of 26.8% is almost one-third lower than the 40% of our northern neighbor and European counterparts. This means, of course, that our northern neighbor and European counterparts must pay for the same commodities we purchase, but with lower disposable income because of increased taxes.

Maybe the change Democrats seek with their increased taxes is a bigger government to give audacious hope to those rural Pennsylvanians desperately grasping onto their guns and Bibles. This change may make us a much less religious people, bringing us closer to the secular norm of our counterparts (82% of Americans consider themselves to be "a religious people," compared to 69% of Canadians, 55% of British, 48% of French, 54% of Germans, and 29% of Swedes). Yet, as stated recently by Syracuse University Professor Arthur C. Brooks whose research led to his book Gross National Happiness: "Faith is an incredible predictor – and cause – of happiness. Religious people of all faiths are much, much happier than secularists, on average. In 2004, 43 percent of those who attended a house of worship at least once a week said they were 'very happy' with their lives, versus 23% of those who attended seldom or never." (It appears, therefore, than those rural Pennsylvanians clinging to their Bibles at least have a smile on their face!).

Change for Senator Obama and his fellow Democrats may, therefore, mean a less educated and less productive America paying more in taxes (and therefore having less for rising food and fuel prices) and taking more anti-depressants. If this is the change they seek, I respond simply: No thanks!