Thursday, March 22, 2007

The housing bubble pops

So, the housing bubble is popping and a lot of people are howling. Lenders are losing money or even going out of business because they made questionable loans. Borrowers are being foreclosed on because they took out questionable loans. Flippers are taking a bath as the value of their investments goes down. And through all that gnashing of teeth and cries of pain, many bloggers are asking: What should the government do?

That question is probably the easiest to answer of all time: nothing.

Things are working exactly as they should. People who made bad decisions are facing the consequences. People who got greedy are reaping the fruits of that greed. Let them learn their lessons. It's the only way to make sure this kind of thing doesn't happen again for another generation. Try to regulate this problem out of existence and the herd will just find another investment, or loopholes in the regulations to create the same conditions.

Monday, March 19, 2007

'08 analysis- the Republicans

The outlook here is much brighter than it was when I did my first analysis back in May. George Allen and Bill Frist are out. Actually just about all Republicans who were closely identified with the current President are out. This is a good thing. Now, on to the contenders:

Rudy Giuliani-I predicted that he might not run, but he's in, and now leading by a wide margin over second place John McCain. He's a bona fide superstar. Democrats are already trying to knock him down a peg by claiming that his popularity is based on 9/11 and that he was not very popular in New York prior to that. Nonsense. Rudy Giuliani turned New York around. Yes, he upset a lot of people, but his approval ratings were always consistently high and he won reelection easily in 1997. The big question hanging over his head is whether or not social conservatives will get behind him once they find out about his past and his stance on social issues.

John McCain- McCain apparently made a calculation sometime last year. He knew that his biggest obstacle to the Presidency was winning the nomination. In order to do that, he had to mend fences with the Republican base. He figured he'd lose some Reagan Democrats and independents, but considering he was leading Democratic opponents in frickin' Massachusetts as late as summer 2006, he could afford to give up some of that support. He had independent votes to give up, but was short on Republican votes. So far, that strategy is backfiring. He's lost independent support and gained little from Republicans. He's in second place and is only slightly leading Democrats in trial heat polls. He needs to recapture that 2000 magic. It failed in 2000 because he was up against an extraordinarily well financed, high name recognition candidate. Now he's the best financed candidate with the best name recognition. He needs to go back to doing what voters loved about him.

Newt Gingrich- Still hasn't declared. Better do it soon if he wants to compete. Almost a sure loser if he does win the nomination. Gingrich is the Republicans' version of Hillary Clinton. Everyone's already made up their mind about him and half of Americans have decided they don't like him.

Mitt Romney- his stock continues to rise, but he may have hit the ceiling. He's discovered conservatism VERY recently and his explanations for his sudden change of heart have not been particularly convincing.

Jim Gilmore- ex-governor of Virginia. Did a pretty good job by all accounts, but not good enough to be considered Presidential material. There's only room for one governor in a nomination contest, and Romney is it.

Sam Brownback- Still appeals to religious conservatives, but even if he was electable in a general election, he holds no appeal outside that religious base.

Chuck Hagel- I said back in May that he was the poor man's John McCain. Now that McCain is now trying to become Mr. Mainstream Republican, the maverick slot is open for Hagel. While he has no support right now, if the Iraq war continues to go badly GOP voters might find that he's the only guy with a chance to win. Also keep in mind these facts:

1) Hagel is from Nebraska and will probably do well in Iowa. Hagel is a maverick, so will probably do well in New Hampshire. He won't win either state, but he may do well enough to be the main serious opposition left to whoever the frontrunner is.

2) As of now, 19% of Republicans are anti-war. As the only anti-war candidate on the GOP side, he might be able to count on that 19% as a base. Expect that base to expand if the war continues to go poorly.

Ron Paul- For libertarians, a long-awaited entry into a GOP nominating contest. He stands at 2% right now, but has barely gotten started. His early attempts to raise money have gone well. His biggest problems? Lack of charisma, unwillingness to compromise, he's only a Representative, and a staunch libertarian won't beat a Democrat in the current climate.

Mike Huckabee- One of five ex-governors in the race. Probably the worst of the lot. He's got likeability, but he was a big spender. Like Brownback, he's made religion a big part of his run.

Tom Tancredo- He was in, then he was out, now he's in again. He's still got no chance. His only issue is immigration.

Tommy Thompson- On the merits, the best governor in the field, but so far not attracting much attention. He won four terms in Wisconsin and was the primary mover and shaker behind the 1996 welfare reform. He is to welfare reform what Giuliani was to law and order. He was also one of the few competent Bush cabinet officials when he ran HHS.

Duncan Hunter- a Representative who is not showing up in the polls much yet, but who is generating a surprising amount of enthusiasm among conservative bloggers. Has a good resume( a combat veteran), and has been a leader on conservative issues in the House. While I don't think he can win the nomination, he'll do better than expected considering he's just a Representative.

Frank Thompson- a supposed wildcard entry if he runs, but I don't see it. While he has some starpower, he stakes pretty much the same positions John McCain does that got McCain in trouble with the base.

So, getting down to brass tacks:

Iowa- I have no idea. McCain won't win it. Period. Giuliani could because he's the biggest name. Thompson probably deserves to win it, and if he gets a good campaign apparatus, he just may. If Iraq is still a disaster and still in the headlines, Hagel could win it.

New Hampshire- McCain will win here. Giuliani will do well, Hagel will do well if(see Iowa). Romney will either die here or come back here. Since NH is the home of the libertarian Free State project, Paul should pull at least 10%.

South Carolina- McCain will win here as well. If any of the other candidates stay close, it's still a race heading into Super Duper Tuesday on Feb. 5. I think Giuliani will still be in it and that's about it. McCain will probably come out ahead.

So my current prediction is still the same as before: Clinton vs. McCain. McCain will win and be our 44th President. Still a-ok with a cherry on top with me.

Friday, March 16, 2007

Looking at the '08 race so far- the Democrats

A lot has changed since my last post, more than a year ago, on the '08 Democratic Presidential race. Since a lot of my predictions and observations are now obsolete, I figure I'll post some updated thoughts.

Actually, I did the Democrats over a year ago. Anyway, here's my new analysis of the Democratic field:

Joe Biden: My thoughts on him haven't changed, other than to take back my prediction that he wouldn't declare. It's pretty clear that he will declare, but I still don't see him going anywhere.

Wes Clark: I still think he's got no particular direction as a candidate, and if he's going to run he'd better get in soon.

John Edwards: I said back in Jan. 2006 that Edwards had moved beyond the "Two Americas" class warfare shtick. Well, he either changed back or I wasn't paying attention. Now he seems to be the favorite of the liberal base and has been pandering to them non-stop. That will get him about as far as it got Howard Dean. He could still win, but I doubt he will.

Bill Richardson- Still the best Democrat in terms of resume and still the best executive. He was probably the candidate most helped by Mark Warner's decision not to run. He's raising money at a good clip and is up to 5% in the polls, which for a governor this early is not bad at all. Look for him to be in the top tier by late this year.

Hillary Clinton- No longer a clear frontrunner, but still the most formidable in terms of money and ability to mobilize traditional Democratic constituencies. She's not as much of a sure thing as she seemed in Jan. 2006, but she's still the most likely to win the nomination.

Chris Dodd- This is the Democrat who I've changed my opinion about the most. He's raising money very well and is being a leader within the new Democratic majority. He's well versed in economic issues and is good at working with the other side. Still a second-tier guy with only 1% support, but could conceivably do well in New Hampshire. Still not likely to beat Clinton, Obama, Edwards, or Richardson though. Would make a great VP.

Al Gore- Still not running, but some people think he might. Still a top tier candidate if he does run. Whether he'd win would depend on which Al Gore he decided to be this go around.

Dennis Kucinich- Still terrible, still no chance. You know you have it bad when even Kos thinks you'd make a bad President.

Barack Obama- I said back in Jan. 2006 that he was a future superstar, but probably not running in 2008. Well, he is running, and he's in second place in the polls. He's the best chance to stop Hillary Clinton for Democrats frightened of her negatives. If he can avoid serious missteps and put out good plans, he can win the whole enchilada.

Mike Gravel- the longest of longshots, but he's no fool like Kucinich and has some genuinely good ideas. Maybe if he wasn't in his 80s and maybe if the field wasn't so strong he'd do better.

My overall predictions for the Democratic field?

Edwards wins Iowa. Richardson wins Nevada. Obama wins New Hampshire. Clinton wins South Carolina. We go into Feb.5 with those four and I'll be damned if I can guess which one will win. I'd say Clinton has the best chance, Obama second, Richardson third, and Edwards fourth.

Out of those four, Richardson matches up best with Republicans.

Wednesday, March 14, 2007

How priorities can be revealing

There's a bit of self-censorship going on in the lefty blogosphere. Liberal bloggers constantly tell each other not to say things that reinforce right-wing talking points. The author of the blog New Donkey rightly points out how pernicious this is, because it limits debate. It's an excellent post which I recommend everyone read. But I have another angle here.

Righty bloggers also practice this, but it's not directed at liberals. I have yet to see a conservative blogger urge other conservatives to not say things that would help liberal talking points. What righty bloggers do is urge each other and liberals not to say things that would give comfort or reinforce Al Qaeda talking points. I still think it's dumb, but it is revealing that liberal and conservative bloggers have such different priorities about who they want to avoid helping with their speech.

Why do lefty bloggers expend so much energy trying not to reinforce right-wing talking points, but don't expend any energy at all trying to avoid reinforcing Al Qaeda talking points? I realize that's an extremely explosive accusation, so if someone wants to demonstrate to me that liberals do worry more about the foreign enemy than the domestic enemy I'll be glad to hear it.

Monday, March 12, 2007

Global warming

Jonathon Rauch brings some sanity to the debate on global warming with a great op-ed.

His most significant recommendation is to simply tax carbon emissions and let the market work it's magic. I agree completely. We don't need government caps and controls. What we need is to simply correct the market failure that causes prices to not reflect the true costs of global warming. With those costs factored in, alternative energies will become more viable and emissions will be reduced. And without infringements on our liberties.

Friday, March 09, 2007

Tax us more?

Mark Schmitt and a lot of other liberals seem to think that the era of small government is over, or at least the era of Republicans being able to call for small government and actually win elections is over. He writes:

Just as the tax revolt era had a beginning, so will it have an end. And there are indications that the end might be approaching. In 2006, New Jersey governor Jon Corzine raised taxes. Many expected him to face the backlash that his ill-fated predecessor Jim Florio encountered in the 1990s. Instead, his approval ratings actually went up from the mid-30s to above 50 percent. In 2004, Gov. Mark Warner of Virginia formed a bipartisan coalition to raise taxes and left office in 2005 as one of the most popular governors in state history. This year, the movement to impose limits on state taxes using ballot initiatives (known as Taxpayer Bill of Rights or TABOR), failed in three states once voters— who appear to have become skeptical of tax-cut gimmicks and free-lunch promises—understood the consequences. Perhaps most tellingly, when Bush and the Republicans led a last-ditch defense of their congressional majority with millions of dollars in ads charging that Democrats would raise taxes, it had no impact. In fact, shortly before the election, voters said they trusted Democrats over Republicans on the issue of taxes by 12 percent—a result almost as unlikely as preferring Democrats on national security—even though they fully expected Democrats to raise taxes.

That's because the true rate of taxation is spending, and voters sense that even if they can't articulate it to pollsters. Democrats are more trusted on taxes at this point because over the last 30 years they've been more likely to keep spending fairly close to revenue. Since Democrats have had a hard time increasing revenues, it has in effect made them the party of small government, or at least smaller than Republicans would impose on us.

But the truth is that we are heading down a path toward fiscal crisis that will inevitably require a major increase in revenues. In case that sounds like a euphemism, I’ll say it plainly: Taxes must go up. If Democrats try to avoid that fact, they’ll become mired in trench warfare with Republicans over small-bore increases that will cost them political support and won’t really address the problem. But if Democrats seize the opportunity to define a new era of the politics of taxes, as Republicans did 30 years ago, they can shape the debate in a way that may actually help them to achieve some of their most-cherished policy goals.

Or it could result in spending cuts. In 1993, Bill Clinton's budget plan cut spending and raised taxes by equal amounts. If we did that today, we'd be back in surplus. And taxes would still be lower than they were in 2000.

To avoid an economic crisis or massive cuts to existing programs, taxes will have to increase by at least the amount of the 2001 and 2003 tax cuts that are scheduled to expire. And if we are to restore the promise of activist government that can solve problems and help families make it in a difficult, dynamic economy, then taxes are going up even more, beyond what can be raised by letting the tax cuts expire.Well before the election, budget expert Stanley Collender wrote, “Whether it is fear, resignation, or just reality setting in, an attitude adjustment in the federal budget world is now definitely palpable: there is a growing likelihood that taxes will have to be increased to reduce the deficit.”

Eliminate spending on Iraq, which won't last forever, and the deficit is less than 2% of GDP at this point. It's much easier to close that gap than it was during the Clinton years. Half spending cuts, half tax increases. Problem solved. Sounds to me like Schmitt is being alarmist in order to drum up support for higher taxes.

The first step will be to establish an acute sense of fiscal and economic crisis. That won’t be difficult, since it’s true. The difficulty is in expressing it the right way. “The deficit” is an abstraction. As long as we accept that balanced budgets every year are not a realistic goal, the difference between a deficit of $150 billion and $600 billion is meaningless. Instead, Democrats should emphasize tangible consequences—such as a choice between cuts to vital services and a devastating economic shock versus manageable tax increases.

Isn't that what Bush tried to do with Social Security? Didn't Democrats say there was no real problem, or that the problem was minor enough to be fixed by minor adjustments? Why the call for major tax increases to solve a crisis? The deficit is 2-3% of GDP. Where is this crisis? And how is increasing taxes from the current 17% of GDP to over 21% of GDP "manageable"? Not many of us can afford to give up another 4% of our income.

Of course, Democrats will do what they've done in states where they've tricked people into voting for higher taxes. They will claim that higher taxes are necessary for education, health care, etc., and won't mention how much we currently spend on subsidies for various industries, local pork barrel projects, and $500 hammers.

The government has more than two and a half trillion dollars of our money to spend every year. If they can't spend that responsibly, giving them another half trillion won't make them more responsible. Don't ever let them emotionally blackmail you with stories of starving elderly and children because they are short of cash. They have the money, they just choose to spend a large chunk of it on things that the majority of voters wouldn't support, at least not for the amount of money it costs.

Friday, March 02, 2007

Employee Free Choice Act passes

Or more accurately, the Abolition of Secret Ballots passes. Get ready for a knock on your door and some tough-looking organizers urging you to sign the card "for your own good. Oh that's a beautiful daughter you have there. Be a shame if anything happened to her."

The main reason cited by supporters of this law is that employers can intimidate employees during the long drawn out affair known as an election. Employers also face way too light penalties for firing workers attempting to organize. Fair enough. Increase the penalties! The current penalty is a year's wages. Make it so that every employee fired for organizing becomes a millionaire. But don't force workers to have to tell organizers no to their faces.

Also, will there be full disclosure here? Currently, a person who signs a card thinks they are doing it to support an election later. Just as I sign petitions to get things on the ballot in my state even though I don't necessarily support them, I could see signing a card in order to support the right of my fellow workers to decide whether to organize or not.

Between the intimidation(currently estimated at around 12% of workers by organizers) and people not being fully aware that they are making an irrevocable decision, we're going to see plenty of unions formed with far less than majority support.

Well, we would if it got signed into law, which isn't going to happen, thank goodness.

After Democrats lose this battle, they should go back to the drawing board and increase penalties for businesses firing workers attempting to organize. Almost no one would be against that other than businesses who don't want to play fair. It would be a political victory if Bush had to veto it. Considering how reluctant Bush is to use his veto pen, I'm not sure if he even would.