When Circumstances Treat Obama Unfairly

Via Sam Stein at the Huffington Post, the deal struck Friday night apparently contained $1.5 billion in cuts to Obama's proposed high speed rail budget.

In this situation, people like me and others on the left will criticize Obama for caving on a major priority and cutting from a rail infrastructure budget that was too small to begin with.

People on the right will still make hysterical claims that Obama is a scary, African socialist-Muslim.

The only people that will be pleased by this kind of policy are the bland Washington punditocracy who may take it as a sign of moderation and seriousness.  Unfortunately, the punditocracy has found itself almost comically unwilling to say anything good about any Obama policies.

Liberalism Gone Wild

I have to admit, when I saw this headline about a city attempting to curtail all sugary drinks in municipal offices, my immediate guess was San Francisco.  So congratulations, Boston!  You surprised me.

I support instituting taxes to increase the cost of food products with harmful health impacts.  Taxes on alcohol, cigarettes, gambling and other activities with public safety or public health implications are widely accepted.  Capturing the cost of those societal externalities is good public policy.

But this sort of heavy handed attempt to control people's choices - especially when done by a public employer - is exactly the kind of awful policy that partially validates conservative claims that liberals want to introduce a nanny state.


No, we don't have a health care crisis in our country. Why do you ask?

These stories, this one via Crooks & Liars, about free health care clinics and the terribly long lines that they draw, are really depressing.  How we can have a situation where one half of our political system basically waves its hand at this issue and says, "Nothing to see here," is beyond me.

My State's Incredibly Bloated Legislature

Many, many stories about the amazingly wasteful institution that is the Pennsylvania Legislature.  These stories are focusing on legislative staff, rather than the actual wasteful, expensive legislators themselves.

Allow me to summarize:

The Legislature is huge, with lots of unnecessary members.

Each legislator's staff is huge, with lots of unnecessary employees.

Overall, the thing is big, inefficient and very expensive.

And Right on Schedule

I missed this from earlier today, but apropos of an earlier post, right to work legislation has apparently already been put forward in the Pennsylvania House.

Mitt Romney is Running for President

No surprises, and I don't have much to add.

Nevertheless, it is sad when the one who believes in magic underwear is the "serious" GOP candidate.

Is America Europe's Mexico?

Free Exchange led me to this piece from the LA Times.  To quickly summarize, the story discusses an Ikea manufacturing plant in Danville, Virginia.  Workers there are apparently trying to unionize, claiming they are suffering from relatively low pay, strict work conditions, unpredictable schedules, forced overtime and multiple cases of racial discrimination.  The workers are also taking issue with the fact that employees doing virtually identical jobs at facilities in Sweden enjoy higher pay, better conditions and more paid vacation.

Ikea has a relatively friendly image, both here in the States and in its home country.  It is generally known as a responsible company and allows all of its employees in Sweden to unionize.  According to the article, this has been a much bigger story in Sweden than in the US due to surprise at the companies seemingly incongruent actions.  However, I don't see why anyone should be surprised.  This is what companies do.  Any operation that can be sent to an area with lower wages and weaker labor protections will be sent there.  It just isn't that often that we in the US think of ourselves as a cheap labor substitute for more expensive workers.  Driving home the point, an organizer from Danville, Bill Street said, "It's ironic that Ikea looks on the U.S. and Danville the way that most people in the U.S. look at Mexico."

Unfortunately, Americans had better get used to it.  Already within the country, states compete with one another by weakening environmental and labor laws in order to attract jobs from other states or other countries.  This race to the bottom has set off pushes in many states to pass Right to Work laws to compete with lower wage states.  The Commonwealth Foundation, a conservative think tank here in Pennsylvania, is a strong supporter of such a policy.

I have no doubt that this sort of competition is going to become increasingly common as states desperately try to boost employment.  So more states will be forced to compete with each other like they used to compete with Southeast Asia and Latin America.  And all the while, we'll be even cheaper labor for our new Scandinavian overlords.

Good for Iceland

Via the BBC, Icelandic voters have rejected a deal to reimburse Great Britain and the Netherlands for costs associated with the failure of Landsbanki.  As of right now, Iceland seems to be the only country in the world that has decided to put the will of its citizens ahead of the needs of the private bankers that helped
wreck the economy.

Of course, the British and the Dutch will now take the matter to international courts in an attempt to get the money.  I sincerely hope that the courts will rule that foreign creditors don't have the right to hold a sovereign nation and all of its taxpayers hostage in order to make good on the private debts of irresponsible bankers.


The European Central Bank is Courting Disaster

Via Matt Yglesias, I came across this news.  The ECB has decided that it is time to raise interest rates by a quarter percent to 1.25%.

I can't think of a more irresponsible thing for the ECB to do, especially coming the day after the news that Portugal will become the third country to request financial assistance from the EU.

The sovereign crisis in Europe has slightly different causes and effects in different countries, but the predominant problem for Greece, Ireland, Portugal, etc. is the need to realign their prices and particularly wages with Germany and the Euro core.  Tightening monetary policy and raising rates is one of the easiest ways to exacerbate that type of debt deflation problem, as the US learned during the Great Depression.

It's difficult to imagine what goal the ECB is trying to achieve here.  Bond markets are already demanding prohibitively high yields on the debt of troubled nations.  This will make that problem even worse.  It will make the entire process of price realignment slower and more costly on the local populations of peripheral Euro nations.

This will very possibly have the other perverse consequence  requiring ANOTHER round of bailouts for Irish banks.  Higher rates means slower growth, more defaults and larger balances sheet problems for Irish banks and, ultimately, those banks' French and German creditors.

The combination of financial sector bailouts and austerity budgets has already destabilized the Irish and Portuguese governments.  There is already the chance that new successor governments in these nations may be less willing to play ball with EU authorities.

I suspect that this drives us much, much closer to one or more nations deciding to pull out of the Euro.  However, even if this doesn't undermine the Euro, I'd expect some very negative market reactions over the next week as people digest this change.


Conservatives: Facebook is Part of the Obama Plot

Picked up this little tidbit over at The Fox Nation.  Original story here at Yahoo! News.

Apparently, conservatives are now outraged because Facebook intends to hold an online town hall for Obama and is considering hiring Robert Gibbs to be its new communications director.  Apparently this is an outrage that is causing conservative activists to cancel their Facebook accounts in protest.

I wish I could link directly to some of the comments on Fox Nation, but I'll just quote from them instead:

"I really like Facebook because I can keep up with my friends; however, if Gibbs is hired, I'm gone. Then it's only a matter of time before our posts will be monitored."

"My whole family closed the account weeks ago. Did not see the need to help a progressive site along any more."

I can only imagine how exhausting it would be to fit every single event that occurred on a daily basis into your narrative about the massive, evil forces that were aligned against you.  But when I patrol the right wings blogs, new sites, etc. that is exactly what I see people doing.  Every event is suspect.  Every coincidence is proof of the evil plots of shadowy enemies.  I can't imagine expending the much energy on something so absurd.

Of course, I'm sure it's only a coincidence that Fox and its parent News Corp., owner of MySpace, is helping to push this story.