The Price of Press Bias

July 18, 2017 at 3:13 pm

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Media bias is costing me at least $37.06 a year, I write in my latest column. Please check it out at Reason (here) and Newsmax (here).

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Soft Bigotry of Low Expectations

July 18, 2017 at 2:06 pm

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A joint white paper from the Hoover Institution and the American Enterprise Institute economists John Cogan, Glenn Hubbard, John B. Taylor, and Kevin Warsh contends that tax reform, regulatory reform, spending restraint, and "budget reform and monetary reform" can "raise the economic growth rate to 3 percent."

They may or may not be right, but what strikes me is the modesty of the goal. They are aiming low. For comparison's sake, President Kennedy aimed, ambitiously, for 5% growth and achieved it, and the George W. Bush Institute organized a conference in 2011 on the topic of how to get America's GDP growing at a 4% annual real rate.

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Mass Health

July 18, 2017 at 12:40 pm

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The Massachusetts Fiscal Alliance, a center-right budget watchdog group, has a post about Governor Baker's new budget that has some national implications in respect of the urgency of Washington taking some action on health care:

In the past six years, MassHealth enrollment has increased from 1.3M to 1.9M... spending on the program doubled from $8.7B to $16.5B. MassHealth currently accounts for over 40% of the state's budget.

MassHealth is the state's version of Medicaid, the health insurance that covers the poor. Baker is a former health insurance executive, so he has some expertise in the area and might be able to get a handle on it if he can get the Democrat-controlled legislature to cooperate rather than demagogue the "cuts" as a political bludgeon against Baker, who is up for re-election in 2018.

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SEC Splits on Insider Trading

July 17, 2017 at 9:12 am

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Reuters reports:

The U.S. Securities and Exchange Commission has affirmed the dismissal of an administrative case against a former Wells Fargo & Co trader after two commissioners split on whether the evidence proved he engaged in insider trading.

The ruling on Thursday came in an appeal by the SEC's enforcement division of an administrative law judge's 2015 ruling dismissing the case against Joseph Ruggieri, who was accused of trading on tips supplied by a Wells Fargo analyst.

It marked a rare loss for the SEC's enforcement division in a case pursued through an in-house administrative proceeding. Critics call such fast-tracked proceedings unfair to defendants, some of whom have challenged the system in court....

In Thursday's ruling, the two commissioners deciding the case deadlocked on a different issue, of whether Ruggieri had indeed placed his trades while aware of non-public information.

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Mexico Gas Privatization

July 14, 2017 at 8:00 am

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"Mexico Oil Privatization Pays Off WIth Billion-Barrel Find" is the headline over a Bloomberg News article reporting on a new billion-barrel find in an offshore field, "possible only after the government ended the monopoly of state-run Petroleos Mexicanos."

Bloomberg reports, "Mexico opened up to exploration by private companies in an effort to slow and eventually reverse the decline in its oil production."

It looks as if there is widespread agreement that individuals motivated by profit do a better job at exploring for and producing oil than government employees do. It'd be interesting to think about what activities other than oil exploration fall into that category and might also be contracted out to private firms with improved results. Operating subway systems? Educating students? Or, conversely, are there other tasks that government employees do better and should be reserved to them?

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Another Big Defeat For Preet

July 14, 2017 at 12:24 am

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Kudos to one of my favorite judges, Jose Cabranes of the Second Circuit, for his decision and opinion vacating all counts of the criminal conviction of Sheldon Silver, the former speaker of the New York Assembly.

Judge Cabranes, writing for a panel that also included Judge Richard C. Wesley and Judge William K. Sessions III, wrote, "though we conclude that the jury instructions at Silver's trial were erroneous, we do not ascribe fault to the District Court or to the government."

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Zoning and Growth

July 11, 2017 at 10:31 am

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The way that zoning hampers new housing construction, raising prices by constricting supply, has been a long-running theme around here (see this item from last month for an example that includes lots of links to our earlier coverage). Now two more voices have joined the issue. Here is my former New York Sun colleague, Errol Louis, now political anchor of NY1 News, writing in the Daily News, advising Democrats to seize the opportunity:

Dems also have a chance to embark on a national campaign to restart the home-building market, in part by championing local zoning rules that encourage new development. Doing so might ruffle the feathers of local environmentalists, but a pro-growth economic agenda is what voters in depressed urban and suburban swing counties are looking for.

And here is New York Times columnist David Brooks:

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Blaming the Bankers

July 9, 2017 at 3:42 pm

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The Sunday New York Times has a review of Jesse Eisinger's new book The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives.

The review concludes:

While the "unelected permanent governing class" may have been willing to look the other way when highly paid bankers wrecked the economy, many of the workers who lost their jobs and families who lost their homes were not. Outside the Beltway, the fact that the Wall Street titans who blew up the financial system suffered little more than slight reductions in their bonuses only reinforced the perception that the "system" is "rigged" — with the consequences we know only too well.

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Robin Hood Jumps the Shark

July 5, 2017 at 12:11 pm

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The Robin Hood Foundation is a New York-based charity that has done a lot of fine work in support of education reform, and with the support of a lot of center-right donors from the financial industry. So it's disappointing to see a Time article under the byline of the Foundation's new CEO, Wes Moore, that includes this passage:

what was once a war on poverty has become a war on the poor. I say this not to cast judgement on any particular administration or political party. From the housing policies of the '70s, through the taxation policies of the '80s, the welfare and criminal justice reform efforts of the '90s, the education policies of this decade, to this new proposed health care bill; America has a shameful history of instituting policies that have put people into poverty and kept them there.

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Is July 4 a Religious Holiday?

July 4, 2017 at 7:45 am

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The Irish Times has published a column I wrote about the theological underpinnings of American Independence, particularly as they were understood by President Kennedy. Please check the full column out here.

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Nationalism Without Guilt

July 4, 2017 at 7:39 am

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Our country's birthday, July 4, is a good moment for remembering that, contrary to what you hear from President Obama and from much of the press, "nationalism" isn't just another word for racism or xenophobia. My column this week gets into that with reference to the Declaration of Independence. Please check the full column out at the New York Sun (here) and Newsmax (here).

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Privatize the New York Subway

June 30, 2017 at 10:12 am

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After the latest round of embarrassing subway delays and breakdowns, Governor Cuomo has brought back one of the state's more competent public-sector managers, Joseph Lhota, as chairman of the Metropolitan Transportation Authority, announced a state of emergency for the system, and offered 3 prizes of $1 million each for ideas on how to fix it.

My own solution for the problem is the same one expressed back on April 16, 2002, in the first editorial of the New York Sun, and expressed again ten years later, here at FutureOfCapitalism, back on October 29, 2012: sell the subway, in pieces, to private operators, and let them compete on the basis of safety, reliability, comfort, cleanliness, and price.

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Freedom in France

June 30, 2017 at 9:51 am

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Sometimes the New York Times has an easier time understanding freedom in other countries than it does in America. A Times feature that appears in the business section asks, in a headline about France, "can the land of the 35-hour workweek overcome its cultural and regulatory barriers to surpass London and other tech hubs?"

"Regulatory barriers"? Do tell.

Sure enough, under the subheadline, "growth obstacles," the Times reports:

Taxes are high to fund France's social welfare system, and the 3,400-page labor code introduces new regulatory requirements on companies as they get larger....

When [one founder] wanted to offer stock options to lure and retain engineers and designers, the French rules were so complex that he dropped the plan. Social taxes pushed his employee costs to nearly twice what they would be in the United States...."Regulations and taxes have still not evolved enough to allow start-ups to flourish once they get off the ground," [the founder] said.

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Another Bharara Conviction Overturned

June 22, 2017 at 2:19 pm

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When Preet Bharara was Manhattan's U.S. attorney, he prosecuted precisely one case in court himself. His team won the case at the time, but a district court judge just vacated one of the convictions...

The current case involves John Pauling, who had been charged with intent to distribute 100 grams or more of heroin. The district court judge, J. Paul Oetken, ruled that the prosecutors used misleading charts (which showed Pauling selling more heroin than they proved at trial), that they did not disclose those charts to the defense beforehand, and that they did not offer adequate proof of the charge, relying instead on speculation.

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Preet's Book Deal

June 22, 2017 at 1:50 pm

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Preet Bharara, who had more than a half dozen of the insider trading convictions he won overturned or dismissed after an appellate court found that the legal theory they were brought under was unfounded, now has a book deal with Knopf about "integrity" and "moral reasoning" to go along with his post as "distinguished scholar in residence" at NYU Law School.

I'm looking forward to reviewing that book. Maybe some enterprising editor will ask one of Mr. Bharara's victims — like Michael Steinberg or David Ganek — to write a review. So far I haven't seen any word about how much money is involved in the advance, but if it is significant, it's worth thinking about the commercial incentives involved for a prosecutor who can cash in after overreaching by bringing criminal cases that weren't warranted.

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