May 21, 2015 at 1:23 pm
New York state's financial regulator, Benjamin Lawsky, is leaving his job to start a firm that "will provide compliance and risk management advice to a range of companies," the New York Times reports. It's yet another case of a regulator cashing out by going to work for the people he used to regulate. The Times article reports further:
the fines Mr. Lawsky collected became a revenue stream for the state. Mr. Cuomo recently trumpeted the money as "basically a gift from above" that he will use for infrastructure upgrades and other expenses.
This formulation of the fines as "a gift from above" is pretty priceless.
It's not a "gift" — gifts are voluntary, while these settlements are extracted from companies by force. As the Times puts it later in the article: "Banks complained that the threat amounted to a shakedown. Faced with the choice of settle or die, the banks understandably chose to settle."
May 21, 2015 at 12:43 pm
Regular readers of this site know that I'm not shy about criticizing Warren Buffett when I think he deserves it. But on two items recently in the news, I think his critics are on shaky ground.
Clinton in Haiti
May 21, 2015 at 12:07 pm
Earlier this month we linked a New York Times account of how Hillary Clinton's brother Tony Rodham was hoping to earn $1 million on post-earthquake Haiti recovery efforts. Now the Providence Journal has an op-ed from the head of a school in Haiti raising more questions about what the Clintons were doing there:
One example of Bill Clinton's dressing a wolf in lamb's clothing with his win-win spell is the Irish telecom mogul Denis O'Brien. Clinton cannot seem to praise his billionaire friend and foundation donor enough. In an article he penned for Time, Clinton wrote, "In Haiti ... phones have revolutionized the average person's access to financial opportunity," and goes on to write glowingly about O'Brien's role in Haiti's mobile "revolution."
May 20, 2015 at 11:12 am
The Foundation for Economic Education has posted an article by Robert P. Murphy documenting "the empirical failures" of Paul Krugman, the New York Times' Nobel laureate columnist. It's a nice example of accountability journalism applied to a journalist, if that is what Professor Krugman is.
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May 20, 2015 at 10:21 am
Yale's $8.5 million payout to its former president Richard Levin is the subject of a news article in the Wall Street Journal, which adds some interesting context to two other articles: this one from Tablet magazine on the current Yale president, Peter Salovey, calling on Yale's graduating seniors to go fix the world, and this one, a column by Frank Bruni in the New York Times, on what Mr. Bruni calls "the shockingly lucrative deals that have become almost commonplace among college presidents." Mr. Levin's payout was even larger than the one E. Gordon Gee got from Ohio State, which Mr. Bruni also writes about.
Magnet Versus the Kleptocrats
May 19, 2015 at 12:05 pm
Myron Magnet is brilliant, but I'm not so sure I buy his argument in this article in the Manhattan Institute's City Journal. He says developers' concern for the 421a tax abatement is preventing them from fighting the extension of rent stabilization laws:
Sell Amtrak to Make It Safer
May 19, 2015 at 11:45 am
How the experience of the for-profit, safety-obsessed Genesee & Wyoming railroad can add to the discussion of the fatal Amtrak crash is the topic of my column this week. Please check it out at the New York Sun (here), Reason (here), and Newsmax (here).
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More Non-Bank Lenders
May 14, 2015 at 10:44 am
Further to the post here last month about the rise of non-bank lenders, the New York Times has more:
risk-taking and jobs are flowing to dozens of new alternative lenders. The start-ups aim to reinvent small-business and consumer lending by offering quicker approvals, relying on automated credit checks that include data feeds from bank accounts and tax returns, salted with inputs from social media....Bond Street is one of 25 digital small-business lenders that rely heavily on data analysis in making decisions, aiming at a market with $300 billion in outstanding loans, according to a report in April by Autonomous Research. Lending Club and several dozen other new lenders compete for an additional $450 billion in consumer and student loans. ...the loan approval rate of new small-business lenders is 62 percent, much higher than the 21 percent at traditional big banks
Ramen and Bagels
May 14, 2015 at 10:10 am
From a New York Times restaurant review earlier this month, explaining why a chef decided to close a pop-up ramen shop that had been open after-hours inside a bagel store:
Last week, Joshua Smookler, Mu Ramen's chef and its owner, told me "the real reason" he had decamped from the bagel shop.
"I was scared of the government finding out what we were doing," he said, even though he believed it was legal...
Either Mr. Smookler is paranoid or would-be businessmen in New York City have a well-founded fear of excessive government regulation.
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May 13, 2015 at 2:32 pm
The Washington Post has a fascinating dispatch on local politics in Chevy Chase, Md., a suburb of Washington:
Many who wrote in Cecere's name say their town has become farcically overregulated, rendering the simplest home additions a months-long or even years-long struggle. A tree ordinance prescribes a six-month jail term or a $1,000 fine for a second offender caught cutting without a town permit.... Property owners seeking to cut down any tree 24 inches or larger in circumference must have a permit approved by the town arborist and town manager attesting that the tree is dead, dying or hazardous.
If turned down, residents can appeal to a Tree Ordinance Board, which applies a series of nine criteria to its decision, including the overall effect on the town's tree canopy, the "uniqueness" or "desirability" of the tree in question and the applicant's willingness to plant replacement trees.
Obama and Arthur Brooks
May 13, 2015 at 11:20 am
Highly recommended: The transcript of a panel discussion on poverty featuring Harvard professor Robert Putnam, President Obama, and the president of the American Enterprise Institute, Arthur Brooks. The whole thing is worth a look, but the highlight for me is this passage:
THE PRESIDENT: I'll ask Arthur for some advice on this -- because, look, the devil is in the details. I think if you talk to any of my Republican friends, they will say, number one, they care about the poor -- and I believe them. Number two, they'll say that there are some public goods that have to be made -- and I'll believe them. But when it comes to actually establishing budgets, making choices, prioritizing, that's when it starts breaking down.
Obama Versus Warren on Trade
May 11, 2015 at 8:50 pm
The clash between President Obama and Senator Warren on fast-track trade negotiation authority is the subject of my column this week. Please check it out at Reason (here) and Newsmax (here).
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How To Fix Baltimore
May 11, 2015 at 8:48 pm
Cut property taxes, Reihan Salam writes in Slate. He uses Boston as an example:
it is no coincidence that Boston's property boom followed a statewide cap on property taxes that went into effect in 1982. Homeowners no longer feared that their property taxes would increase without limit, so more and more of them were willing to invest. While Boston lost 30 percent of its residents between 1950 and 1980, it gained 5 percent over the next two decades and the median household income in the city increased 38 percent faster than the national average from 1979 to 2005. ...When the Massachusetts property tax cap was being debated, many feared that cities like Boston would be starved of revenue as services collapsed. Instead, a rush of new investment and economic activity led to healthy increases in property tax revenues.
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Tony Rodham's Taxes
May 11, 2015 at 11:18 am
From a New York Times account of a plan by Hillary Clinton's brother Tony Rodham to get a Chicago-area contractor involved in post-earthquake rebuilding efforts in Haiti: "Mr. Rodham projected that he could make $1 million on the Haiti deal if it came to pass — enough money, he said in his court testimony, to take his family to Disney World and cover his debts, including his legal bills and his long overdue federal taxes."
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Regulation Run Amok
May 11, 2015 at 10:10 am
Charles Murray's new book, By The People: Rebuilding Liberty Without Permission, was excerpted over the weekend by the Wall Street Journal:
The laws setting out these crimes are often so complicated that only lawyers, working in teams, know everything that the law requires. Everyone knows how to obey the laws against robbery. No individual can know how to "obey" laws such as Sarbanes-Oxley (810 pages), the Affordable Care Act (1,024 pages) or Dodd-Frank (2,300 pages). We submit to them....
Let's withhold that compliance through systematic civil disobedience. Not for all regulations, but for the pointless, stupid and tyrannical ones.
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