Student Loans and Health Reform

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The Obama administration and Congressional Democrats want to include a federal takeover of the student loan industry and an "vast" expansion of federal aid to college students (which, of course, will be passed through as tuition to overwhelmingly Democratic college faculty members) as part of a health bill, the Washington Post reports. This seems like another way to demonize, those who vote against the bill -- not only do they want to deny health insurance to cancer victims because they are tools of the health insurance lobby, but they also want to deny college educations to the poor because they are tools of the banking industry lobby.

Senator Harkin, Democrat of Iowa, offered his own explanation for wrapping the student loan issue into health care: "Who knows whether or not we'll be able to get a budget through this year? If we don't, that will be the end of it. If we don't do this now ... I don't know when we'll ever get to it again. This is the opportune time to do it now."

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Beck, Hayek, and Social Justice

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The New York Times has an article on the reaction to broadcaster Glenn Beck telling listeners, "I beg you, look for the words 'social justice' or 'economic justice' on your church Web site. If you find it, run as fast as you can. Social justice and economic justice, they are code words...If you have a priest that is pushing social justice, go find another parish. Go alert your bishop."

It made me think of Brown University professor John Tomasi's 2007 Hayek Lecture to the Manhattan Institute:

Hayek certainly indicates that he is opposed to social justice. Indeed, he wrote an entire book on this subject, The Mirage of Social Justice. He writes, "Only situations that have been created by human will can be called just or unjust." Justice, Hayek tells us, is a property of the actions of individual persons. The complex pattern of holdings that we find across a free society, Hayek says, is the product of many human actions. But that pattern is not the product of any single human will. To apply notions of justice to the relative holdings of people across an entire society, Hayek says, is simply confusion. The term "social justice," Hayek tells us, "does not belong to the category of error but to that of nonsense, like the term 'a moral stone.'" On this orthodox reading, Hayek is opposed to social justice. Indeed, in one place Hayek compares a belief in social justice to a belief in witches...

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Desiree Rogers's 'Exclusive Building'

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The New York Times has a "rise-and-fall" type piece on White House secretary Desiree Rogers, reporting, "After taking an apartment in the same exclusive Georgetown building as her friend, Ms. Jarrett, Ms. Rogers quickly became a hot Washington draw." The Times doesn't say what makes the building "exclusive." Washington City Paper has an article that reports that the building, "is roughly two-and-a-half inconvenient miles from the White House and it's practically on top of a Pepco substation. Also, the Whitehurst Freeway features prominently: Descend from your black SUV onto the circular front driveway, and you can't see half the building. The highway above blocks the view, as the sound of speeding trucks and cars rattles over your head." It's a condo building, not a New York-style co-op, so it's hard to see who is being excluded, other than people who can't afford to buy an apartment there. I've mocked Harry Reid and Governor Paterson for staying at the Ritz, so I suppose I may be guilty of the same thing the Times is guilty of here, but it's not clear to me that the building Rogers and Jarrett live in is exactly the Ritz.

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Read It Here First

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The Wall Street Journal waddles in today with a review of Roger Battistella's book Health Care Turning Point, which we reviewed here back on February 28.

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One More Point on Rove

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Karl Rove is covered more extensively in the book review, but the former Bush aide makes another point here in an interview with Politico's Mike Allen that is worth having a look at.

Mr. Rove says: "Look, the bank bailout worked. ..it was the right thing to do and it worked, and both President Obama and President Bush supported it. President Bush loaned the banks $240 billion with the understanding that they would have to pay it back and they had to pay interest and dividends along the way. President Obama lent $7 billion to the banks, mostly smaller banks, and all of that $247 billion, virtually all of it is going to be repaid, there's going to be interest and dividends, and we will end up making a profit on that $270 billion—$247 billion. Where we're going to lose money is what was not anticipated which is the money that President Obama lent to the car company—to some car companies—Chrysler and GM, not Ford—and to their financing arms and to AIG. The administration has already admitted in a report several weeks ago that the cumulative losses of the entire program will be $83 billion, meaning there'll be nearly a hundred billion dollars of losses they're willing to admit today on the $300 billion that they lent to the car companies. We'll make money on the 247; we'll lose money on the 300. Bush was the principal driver behind the 247; Obama is the principal driver behind the 300."

Mr. Rove's claim notwithstanding, the fact that government will "end up making a profit" or "make money" on a particular program is not necessarily a sign that it is the right thing to do.

Those profits or money don't just come out of thin air -- in the case of the banks, they come right out of the pockets of the shareholders, or out of pools of capital that might otherwise be used to make loans that will help get the economy growing. That's a particularly important point to remember given that at least two major banks, Wells Fargo and BB&T, say they were forced to accept the TARP money. (For the details on Wells Fargo, see here and here; for BB&T, see here.) It's not a great surprise that the government was able to make money from a program in which it used its own awesome power to dictate terms to the bankers.

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House Votes on Fake Census Mail

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The House of Representatives is moving to crack down on those deceptive "Census" fundraising letters from the Republican National Committee. We reported on the letters here back in January. Now, reports ProPublica, "the House of Representatives unanimously passed legislation that specifically bans misleading mailings that are designed to look like they're from the Census Bureau. The new bill requires that any mailing marked 'census' include the sender's name and address, plus a disclaimer that the survey is 'not affiliated with the federal government.'"

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Obama's Doctor Cousin on ObamaCare

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Milton Wolf, a Kansas radiologist who is a cousin of President Obama, has an op-ed piece in the Washington Times opposing ObamaCare:

It is difficult for me to speak publicly against the president on his central issue, but too much is at stake.

I wish my cousin Barack the greatest of success in office. But I feel duty-bound to rise in opposition to Obamacare. I must take a stand for my patients, my profession and, ultimately, my country. The problems caused by government will not be solved by growing government. Now that this new era of big-government takeovers has spread to our health care system, it's not just our freedoms or our wallets that are at stake. It's our lives.

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review of Courage and Consequence: My Life as a Conservative in the Fight

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To judge by his new memoir, Courage and Consequence: My Life as a Conservative in the Fight, Karl Rove, the longtime aide to President Bush, is an angry man.

After reading the book, you have a better understanding of why. He had a rough young adulthood. His parents had a bad divorce when he was 19. Mr. Rove writes of his father, portrayed overall in the book quite favorably, "To this day, I have no idea if my father was gay. And, frankly, I don't care." Mr. Rove learned by accident from an aunt that he'd been adopted. His biological father wanted nothing to do with him. When Mr. Rove was 30, his mother committed suicide as her third marriage was failing.

As if all that were not enough, journalists mucked through all this and reported on it to make money for themselves in their own books about Mr. Rove. The journalists wrote those books while Mr. Rove himself was under the financial strain of living on a government salary while personally paying mounting private legal bills to defend himself from partisan-motivated investigations into his activities as a government official. These investigations extended beyond just the Valerie Plame Wilson leak case that had ensnared Judith Miller and I. Lewis "Scooter" Libby. The New York Times ran 17 editorials groundlessly accusing Mr. Rove of somehow arranging for the prosecution of the Democratic governor of Alabama, Don Siegelman.

All this is revealing and makes a reader who isn't inalterably predisposed to disliking Mr. Rove feel sympathetic to him.

That said, this book is revealing about Mr. Rove and the environment in which he operated other ways as well, perhaps unintentional but ultimately unattractive. Don't expect them to be highlighted by the Wall Street Journal, where Mr. Rove writes a weekly column, or in Newsweek, where Mr. Rove also is a regular contributor, or on Fox News, where he is also a regular.

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Another Take on Agricultural Extension

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A new data point in the debate, prompted by an Atul Gawande New Yorker article, over whether it was the U.S. Department of Agriculture's extension service or private innovation that was reponsible for productivity increases in American agriculture: The Economist has an article on the situation in India, where the private sector, including suppliers to McDonald's, is taking over in driving farming improvements:

State governments once took it upon themselves to spread know-how, market intelligence and the fruits of agricultural research to smallholders. But the agricultural extension system is now in some disrepair. Public investment in agriculture has stagnated over the past few years as the government's subsidy bill for food, fertiliser and fuel has risen.

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FutureOfCapitalism.com on Pacifica Radio

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It's not every day that you get to both appear on Pacifica Radio's Earthwatch program on the very-left-wing WBAI (listen here), and attend Karl Rove's book party, but, hey, as Seth Lipsky would say, don't you love the newspaper life? Or the Web site life, or whatever it is these days. The host of the WBAI program, Robert Knight, interviewed me about my Daily News op-ed piece about the proposed soda tax in New York.

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Make $51,000, Pay No Federal Tax

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The president of the Tax Foundation, Scott Hodge, writes:

Nonpaying status used to be a sure sign of poverty or near-poverty, but Congress and the President have changed the tax laws to pull much of the middle class into the growing pool of nonpayers. The income level at which a typical family of four will owe no income taxes has risen rapidly, now topping $51,000.

As a result, recently released IRS data for the 2008 tax year show that a record 51.6 million filers had no income tax obligation. That means more than 36 percent of all Americans who filed a tax return for 2008 were nonpayers, raising serious doubts about the ability of the income tax system to continue funding the federal government's ballooning expenditures.

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Free Speech for Me But Not For Thee

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"If Congress attempts to inhibit corporate political speech while treating unions with kid gloves, that's not reform. It's just another special-interest payback," writes the general counsel of the U.S. Chamber of Commerce, Steven Law, in the Wall Street Journal.

Fair enough. Exactly right, even. But some of Mr. Law's proposals to restrict union political involvement go way too far in the direction of unrestricted government power. How about this one: "Prohibit unions that are under the influence of organized crime—as determined by the Department of Labor's inspector general—from ingratiating themselves with politicians by spending money on elections." The whole point of the Supreme Court decision is that not even the elected members of Congress have the power to take away someone's First Amendment right to free speech. The "Department of Labor's inspector general" was elected by no one and certainly shouldn't have that power. The inspector general's post isn't even subject to Congressional confirmation. Not to mention that under our Constitution, convicting people of crimes and punishing them for them is a matter for the judicial branch, not the executive branch (with the exception of prosecutors, FBI agents, and the like, whose job is more to start the process or conclude it than to serve as judge).

How quickly will the left respond with a proposal to give the Securities and Exchange Commission's inspector general the power to take away the First Amendment rights of corporations that violate SEC regulations, or the Environmental Protection Agency's inspector general the power to take away the First Amendment rights of corporate polluters, or the Food and Drug Administration's inspector general the power to take away the First Amendment rights of food companies that violate the rules about health claims on packaging? Already Senator Schumer wants to take away the First Amendment rights of companies that took TARP money, even though some of them apparently were forced to accept the funds.

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Conrad Black on America's Problems

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Lord Black writes from prison in Florida:

Americans do not do themselves a favor by not recognizing the terrible erosion of their country's education, justice, and political systems, the shortcomings of U.S. health care, the collapse of its financial industry, the flight of most of its manufacturing, and the steep and generally unlamented decline of its prestige.

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One More on Boeing

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Boeing took a bit of a bashing here yesterday, so it's tempting to ease off a bit. I've got nothing against the company and would rather fly in a Boeing than in a EU-subsidized Airbus. But while, in the course of writing the Bank v. U.S. item, I was searching for examples of press scrutiny of wasteful government spending in amounts less than $519 million, I came across the news that Boeing had been granted a no-bid $15.9 million federal stimulus contract for environmental clean up and monitoring at a site that Boeing itself was fined in 2007 for polluting. Green jobs!

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Bank v. U.S.

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The U.S. Court of Appeals for the Federal Circuit handed down an opinion yesterday in a case known as Bank v. U.S. The opinion, by Judge William Bryson, a Clinton appointee who clerked for Justice Thurgood Marshall, is remarkable for its account of how the government went back on a deal it made with a bank. That breach of a promise essentially forced Anchor Savings Bank (now part of JPMorgan Chase) to sell off a mortgage banking company called Residential Funding Corporation to General Motors Acceptance Corporation. Judge Bryson and two of his collegues upheld a ruling ordering the government to pay JPMorgan Chase at least $356 million in damages. From the opinion:

RFC was an industry leader at the time Anchor purchased it. In the first quarter of 1988, RFC was the largest issuer of private MBS in the nation. RFC generated over $10.5 million in net profit in its first year under Anchor and $7.8 million in net profit during the first seven months of the following year. The business was highly successful and fit well with Anchor's long-term business plans.... In mid-1989, Anchor's CEO wrote that RFC "continues to fly" and was "authorized to double its volume in 1990." At about the same time, Anchor and RFC developed a business plan designed to expand RFC's business into other areas.

On August 9, 1989, Congress enacted the Financial Institutions Reform, Recovery, and Enforcement Act, Pub. L. No. 101-73, 103 Stat. 183 (1989) ("FIRREA"). The new statute—and particularly its implementing regulations, which were announced in October 1989—effectively terminated the favorable treatment of supervisory goodwill that had been promised to Anchor at the time of the supervisory mergers. The sudden eradication of more than half a billion dollars of regulatory capital caused Anchor to fall out of capital compliance by more than $300 million. Facing the threat of seizure and liquidation by the government, Anchor scrambled to raise the necessary capital through a swift series of asset sales. Those sales resulted in the divestiture of RFC...

There are so many points here that are potentially analogous to our current situation that it is hard to know where to begin.

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