The Last Thing We Need Is More Moderates

Academics are given to bemoaning partisan polarization. But the mushy centrism being pushed by the No Labels crowd frequently just amounts to special-interest whoring. Bipartisanship usually means the people get screwed, and the lobbyists win. Latest case in point: the morally corrupt Farm Bill. Congress is claiming it has reformed the program and cut it …

U.S. Infrastructure and Subsidy Spending: Not What You Might Expect

In my last two posts, I showed that the U.S. has a large social welfare state by cross-national standards, maybe even the second-largest in the OECD. However, the U.S. welfare state is much less redistributive from rich to poor than most other welfare states. In this post, I tackle spending on infrastructure ("gross fixed capital …

Bootleggers, Baptists and Cash for Clunkers

Ah, yes, a bit of nostalgia from the "summer of recovery": the Car Allowance Rebate System (CARS), also known as Cash for Clunkers. It seemed quite promising to many in the halcyon days of 2009.  Citizens could trade in their old gas guzzlers (which were subsequently destroyed) for a rebate that could be applied to …

Toward the Next Financial Crisis?

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for …

Obama and Homeownership

President Obama visited Phoenix yesterday to give a speech on homeownership. The promotion of homeownership has been on the agendas of the past several presidents (e.g., George W. Bush and the “ownership society) and much of President Obama’s speech could have been written by HUD secretaries Jack Kemp or Henry Cisneros. While there is little …

Reform in the Age of Austerity: The Farm Bill

The new farm bill is making its way through the Senate and to the House. As it currently stands, it will cost some $950 billion over the next ten years. To be fair, much of that is for food stamps (or the Supplemental Nutrition Assistance Program). As you may know, rural legislators used the original …

In the News: the Good, the Bad, and the Ugly

Let’s start with the good: the Obama administration is considering removing all US troops from Afghanistan at the end of 2014 (rather than leaving a force of 6,000-15,000 behind).  As coverage in WaPo notes, this option “defies the Pentagon’s view that thousands of troops may be needed to contain al-Qaida and to strengthen Afghan forces.” …

The Big Winner in the Fiscal Cliff: Crony Capitalists

There is a wonderfully sad piece in the WSJ on the support for crony capitalism that were central to the fiscal cliff deal. A brief excerpt: In praising Congress's huge new tax increase, President Obama said Tuesday that "millionaires and billionaires" will finally "pay their fair share." That is, unless you are a Nascar track …

Building Good Will and the Financial Crisis

There is an interesting piece by John Bresnahan (Politico) on Countrywide Financial’s VIP Program, which provided loans to members of Congress, staffers, and executive branch officials who were responsible for shaping regulatory legislation. More than a half a dozen current and former lawmakers, including Senate Budget Committee Chairman Kent Conrad (D-N.D.) and House Armed Services …

The Limits of Congressional Gridlock…and Reform?

It seems that all we have heard of late is about the sharp partisan battles in Congress that have placed it in a gridlock and prevented it from working in a bipartisan fashion to “do the nation’s business.” Yes, the “do nothing Congress.” But there are exceptions to this description.  Given the depth and severity …

Tax Simplification

The Obama administration is now proposing to simply the corporate tax code. As the NYT notes: President Obama will ask Congress to scrub the corporate tax code of dozens of loopholes and subsidies to reduce the top rate to 28 percent, down from 35 percent, while giving preferences to manufacturers that would set their maximum …

Business Associations: Whom Do They Really Represent?

Two stories in the news, one local and one national, help us answer that question. First, a pair of stories from the New Hampshire Union-Leader: Representatives of the state's major hospitals fought a proposal that could pave the way for a for-profit cancer facility to come to the state at a hearing Tuesday that was …

Investing Wisely?

A report released by the Public Campaign examines 30 top corporations. Some key findings: Despite making combined profits totally $164 billion in that three-year period, the 30 companies combined received tax rebates totaling nearly $11 billion. Altogether, these companies spent nearly half a billion dollars ($476 million) over three years to lobby Congress—that’s about $400,000 …

NYS Supreme Court Judicially Amends the State Constitution

The New York Constitution prohibits pork-barrel spending and corporate welfare: government money for private projects. Here's what the clause says: [T]he money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking. Couldn't be clearer, right? Wrong. The state supreme court today ruled …