Michelle Obama

According to Lexington, columnist at The Economist, Mrs. Obama ought to give some serious speeches on policy instead of working on or displaying her "perfectly toned" arms.

Lexington mentions the collapse of black families and the 60 percent out-of-wedlock birth rate among blacks, apparently suggesting these as issues Mrs. Obama could speak about. Lexington suggests that the causes of these are job losses, drugs, crime and family breakup.

All these are self-inflicted except one: job losses, and that may be self-inflicted too in some or most cases. (If you don't show up for work then you'll likely lose your job.)

If Mrs. Obama has solutions for the out-of-wedlock birth rate or the collapse of black families and chooses to speak about them, chances are her words will be well received. If she speaks instead on subjects or issues about which she has little or no knowledge -- like the economy or foreign policy -- then her words probably will fall on deaf ears.

Government versus non-government workers

Hardly any federal, state, county, city or school employee ever loses his or her job. They're civil service. Their jobs are guaranteed, if not formally then practically. Meanwhile, non-government employees lose their jobs all over.

That used to be a grand bargain. Government workers were paid less but their jobs were secure and they got good fringe benefits. Non-government ones made more but their jobs were at risk and their fringes were not as good.

No more. Government workers now are unionized. Their pay is as good as or better than non-government workers. Government workers' jobs still are secure and their fringes are outstanding.

Where's the bargain?

More thoughts on bonuses

Congressional behavior last Friday was not merely an exercise in poor judgment, it was vindictive, malicious and petty, all of which proved one thing: those who voted for the 90 percent tax on bonuses aren't nice people. You couldn't afford to consider any of these congressmen or women personal friends, even if you knew them well. They couldn't be trusted to do the right thing most of the time. (None of us does the right thing all the time.) You'd have to watch your back. Yet these people help to govern the United States of America. It's a wonder our nation has lasted this long.

Thank God our founders set up two houses of Congress, neither of which can act alone. Thank God there is an executive branch and a judicial branch, all of which are, in theory at least, independent. If not for this division of authority and responsibility, our nation would have been toast long ago.

Poor judgment

The action Congress took last Friday to tax AIG's and other bonuses at 90 percent is wrong on so many fronts that it's hard to decide what argument against them to bring up next. Here's one that hasn't been been discussed in newspapers and blogs so far.

It's poor judgment to select someone to take charge of an organization and then nitpick or second guess his or her decisions. Instead, the selected person should be judged on results -- did sales increase, is the company more profitable, is there less employee turnover, have contributions increased, are patients happier, are fewer lawsuits filed against the entity, etc. -- depending on what the selected person was hired to do.

In the case of AIG, Edward Liddy was hired to shut it down, with minimum loss to the government and minimum disruption of the financial system. He hasn't yet done that but we knew it would take a while. AIG is large and has tentacles all over, so its liquidation will take time. While Liddy is engaged in doing what he was hired to do, he must be given the authority to make decisions. What he decides must be final, otherwise all the people he deals with will know he's powerless. A powerless CEO is worse than no CEO.

It's counter-productive to countermand a CEO's decisions. If Liddy approves of bonuses, those bonuses must stand. Liddy weighed the arguments for and against paying the bonuses before he approved them. (AIG was legally obligated. AIG needs the people who got the bonuses to help with the liquidation. The bonuses are a lot of money but the cost of not paying them would be more.)

Obviously, if Libby's overseer loses confidence in him, Liddy has to go. Apparently that hasn't happened. If it does, the debate should be over whether to keep Liddy or fire him, not whether this or that Liddy decision should be reversed.

In Congress, irrationality trumps thought and common sense. It shouldn't but it does. Capricious, ever-changing, ex post facto rule-making makes people nervous and destroys their confidence in government, besides which it's unjust.

Irrational rage

Members of the House of Representatives engaged yesterday in irrational rage when they voted a 90 percent tax on some people who have received bonuses, especially highly paid people who work at AIG, Fannie Mae and Freddie Mac. It's irrational because it does more harm than good. The head of Fannie Mae came out this morning and said as much. AIG CEO Ed Liddy told congressmen and women that when he testified on Wednesday. At the least, Congress should wait until AIG has been liquidated and Fannie Mae and Freddie Mac are on sound footing before trying to satisfy its rage.

Further, behavior of the kind Congress is engaged in affects markets. The behavior is interpreted as anti-business and it scares investors. A natural response to such behavior is for investors to become more risk averse. They will seek minimal-risk investments like U.S. Treasury Bills. They will not borrow and they will tighten the belt. Speculators will become short-sellers.

Is that what Congress wants? Whether it wants that or not, that's what it's going to get. The result will be fewer new jobs, more unemployment, higher federal outlays for unemployment benefits, smaller tax revenues and bigger deficits, all to penalize a very few people who make more money than Congress thinks they should.

Why governments shouldn't nationalize

If the AIG fiasco teaches us anything it should teach us why governments shouldn't try to own or manage businesses.

As should be obvious by now, a bureaucrat is different from a business person. Their training is different and their motivations are different. They have different objectives and they have different points of view, which is why a bureaucrat shouldn't be assigned the job of managing a business.

By now, it also should be obvious that government ownership inevitably becomes political. The hearings yesterday in which congressmen and women beat up on AIG's CEO demonstrated the idiocy of combining politics and business.

Still not convinced. Read up on Britain's experience of nationalizing businesses starting in the 1940s, Britain's near bankruptcy in the 1970s and Margaret Thatcher's denationalization in the 1980s. The latter resurrected Britain's economy.

Bonus outrage

One thing that characterizes the bonus outrage is ignorance. No one knows who gets the bonuses or anything about AIG's obligation to pay them -- no one but insiders. That doesn't prevent people from going ballistic about the bonuses. Everyone has an opinion, even if they're ignorant.

Ignorance doesn't stop people writing to the LAT, nor the LAT publishing their letters. A case in point: An ignoramus named Braverman wrote recently in the LAT about the Jon Stewart/Jim Cramer confrontation and made the following idiotic points:

-- CNBC "missed" the "financial tsunami."

-- Most people believe what they see on television.

-- "Corporate-owned CNBC's only real goal is" to make money.

-- CNBC allows "experts" to say anything they want.

-- "We" really need to "reign these guys in."

LAT intervenes for Planned Parenthood

On the editorial page today, the LAT blasts Orange County supervisors for cutting off funding to Planned Parenthood, which had a contract with the County to counsel and educate pregnant teens until one of the supervisors learned they offer abortion services. The LAT says the supervisors "should know that this attack on Planned Parenthood fails every test of logic, reason and responsible public policy." How so?

LAT takes on CNBC

LAT writer Matea Gold ridicules CNBC and "Mad Money" host Jim Cramer today over Cramer's appearance on Jon Stewart's "The Daily Show." The only thing interesting about Gold's piece is why she would write it and why the LAT would publish it.

Gold takes sides, saluting Stewart for disrespecting Cramer. Both are entertainers trying to raise their ratings. If Stewart got a boost at Cramer's expense good for Stewart, bad for Cramer. But neither is the good guy and the other bad.

But Gold also takes a swipe at CNBC. Apparently it covers Wall Street too well or too often or too fervently. Or she hates CNBC because she hates Wall Street. It makes you wonder about Matea Gold and the LAT.

The Economist tilts left

The Economist this week is chock full of praise for Obama, and denial. Obama is working wonders in foreign policy and with the economy, The Economist argues. Give him time, they plead.

Obama isn't trying to do too much and isn't advocating European-style socialism, the magazine argues. It's just that the mean old Republicans are distorting Obama's policies. Blame Newt Gingrich, Mitt Romney and the "firebrand" Mike Pence. Obama could learn from Europeans, The Economist argues.

What he's likely to learn from Europeans isn't likely to appeal to Americans.

Reliance on government

Despite government's track record, liberal,socialists and communists consistently argue for greater governmental control of institutions and people. A case in point: SEC regulators have been criticized for failing to stop Madoff from ripping off investors for $50 million. Liberals argue that could have been prevented by more regulation. But regulations and regulators will never be perfect. Often regulators are careless, lazy and unmotivated -- like the people you see at the DMV, the Post Office and Social Security offices. Or, the regulators at SEC.

What we need: Judges without judgment

That's the argument a guy from Glendora makes in a letter to the LAT, published today. The letter's closing sentence: "Cases should instead be reviewed individually, without any personal inclination or judgment."

The letter protests Clarence Thomas' consistent holdings supporting states' rights. Apparently, the letter writer is unfamiliar with the Tenth Amendment to our federal constitution, which states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people."

Kerry exhibits his poor judgment, again

Senator John F. Kerry, known for idiotic remarks like "reporting for duty," once again displays his lack of judgment in a piece on Bloomberg published March 6th. At a time when Americans learn daily that the economy is in trouble and the stock market is crashing, Kerry thinks it's necessary to tell his readers how bad things are. When Americans need to be told something positive in order to raise their spirits, Kerry tells the banks that "Animal House parties" are a thing of the past and introduces legislation to penalize banks who entertain customers and potential investors. Kerry says "huge swaths of our banking system are insolvent." Thanks, Americans needed to hear that from John Kerry. Federal regulators ought to be able to remove bank management Kerry says. Right, let the bureaucrats decide. If a bank has assets of uncertain value, write then down to zero, Kerry says, unconcerned about the effects. Mark-to-market accounting is fool proof, Kerry seems to believe. Kerry is a fool.

Colombia free trade

A Colombian, Miguel Ricourte-Lombana, writes from Bogota in today's LAT "Letters" that many of his countrymen don't understand "why the U.S. government insists on dismissing our achievements and believes that restricting free trade could possibly lead to improving Colombia's performance." It isn't the U.S. government. It's only Nancy Pelosi and the people who pull her strings.

Gays unhinged

Prop. 8 supporters seem to have won the day yesterday before the California Supreme Court. Opponents' reaction: unhinged vitriol, the same as when voters passed Prop.8 last fall. Logic escapes them. Precedent escapes them. Gays want what they want. To hell with everybody else.

Shut down GM

General Motors is insolvent. That's clear from their financial statements, just published, which reveal that GM's liabilities exceed its assets by $86 billion. It's time to face facts. GM needs either to enter Chapter 11 or be liquidated. Giving GM more government billions before it enters bankruptcy would be like putting a match to those billions.

Creating a nation of slackers

According to the LAT, Los Angeles expects to receive $100 million of federal stimulus money and will put it to work offering welfare recipients entry-level temporary work. If you're out of work and would like one of these jobs, you'd better apply for welfare first.

Let them eat cake

Obama said yesterday in the Oval Office that the stock market engages in "fits and starts" and he suggested that he can't be concerned about such short range events because he's focused on the long range instead. But this bear market has seen a plunge of roughly 50 percent in value. The situation is critical because average people are seeing what little wealth they have evaporate. Rather than concern himself with Social Security or Medicare, the president would be well advised to show some concern for the markets. He ought at least to avoid making matters worse by, for example, appearing on television daily announcing a new idiotic plan or bad-mouthing a bank or CEO, or threatening a "stress test." He ought also not send out his tax-cheating Treasury secretary to do something similar. Markets react unfavorably to such things and it costs citizens money they can't afford to lose.

LAT gets sensible

The LAT and this old fool finally agree on something: that the Columbia free trade agreement should be approved. It's stalled in Congress by Pelosi and company. If Obama has any influence he should use it to get this thing done.

Obamanomics

The Dow was down nearly 300 today, more evidence that investors are worried about Obamanomics. Obama's "cures" for banks, the economy, health care, education, energy, the auto industry, etc. are scary because we don't know enough about what Obama plans but also because what we do know relies on people we don't trust -- like Pelosi, Reid, Franks, Dodd and an army of bureaucrats. These people have never been helpful. Why should we expect them to be helpful now?