Thursday, April 30, 2009

Turning GM over to the UAW and the government

The deal that is coming out of the government aid and deadline for GM is truly astounding. As the WSJ breaks down the numbers, private bondholders of GM securities would get 5 cents on the dollar for their investment and own 10% of the company; the government will own 50% of the company and a return of 87 cents on the dollar; and the UAW would own 40% of the company and have a return of 76 cents on the dollar. Now we know why Obama and the UAW have been fighting so hard to keep GM out of the bankruptcy court.
In a genuine Chapter 11 bankruptcy, these three groups of creditors would all be similarly situated -- because all three are, for the most part, unsecured creditors of GM. And yet according to the formula presented Monday, those with the largest claim -- the bondholders -- get the smallest piece of the restructured company by a huge margin.
The goal seems to be to drive private investors away from the company and leave the UAW in control. What will the government's next action be if GM doesn't recover and people don't buy GM cars in the numbers that they need? Will the government pass laws to favor the car company that we and the unions hold such a large stake in? Will mandates go out to all government agencies that they can only buy GM cars?
Some Treasury officials have told the media that 50% government ownership is important to ensure that taxpayers get repaid for the $16.2 billion in Treasury loans. But this is false logic. Taxpayer-shareholders are likely to be far better off with a smaller stake in a truly private company that is better insulated from political meddling. Private owners are more likely than the Treasury or the unions to try to run the company for profit, and so increase its equity value over time. Treasury says it would be a hands-off owner, but that hardly seems plausible and in any case that would merely leave the UAW in control. At the next labor contract bargaining session, the union would sit on both sides of the table.
This means that the company will never prosper or fully recover. And the impact of this nationalization of GM will spill over to other companies.
Certainly the bondholders deserve to take a haircut like everybody else. But squeezing them in such a blatant fashion has other consequences. Who would be crazy enough to lend GM money in the future? The Treasury also says it wants banks that do poorly in its "stress tests" to try to raise private capital before putting in more public money. The mauling of GM creditors tells investors not to invest in TARP banks because everything this Treasury touches turns to politics.
The Obama administration's approach to GM has sent a chilling message to any investor who might be thinking about putting money into these recovering sectors of our economy. If you invest in a company that fails, forget about getting back a fair percent of your investment through a bankruptcy procedure; the government will simply decide which of the investors they want to favor and if there are any unions in the mix, fuggedaboutit!

The impact of Obama is all encompassing

The man is omnipresent and practically omnipotent. He has had effects far beyond American politics. He's even made people realize that, egads, slavery was involved somehow in the Civil War!
As students across the region begin springtime Civil War lessons, historians say the election of Barack Obama as the first African American president offers an unprecedented opportunity to break through stereotypes and view the era in broader ways.

"His election means we can be more honest. We can stop giving one-word answers," said Edward L. Ayers, a Civil War scholar who is president of the University of Richmond, in the city that became the capital of the Confederacy.

Obama's ascent, historians say, has opened the door to a national discussion about race. There is renewed relevance to issues surrounding the country's racial past, including the origins and aftermath of its deadliest conflict, said Randall Miller, professor of history at Saint Joseph's University in Philadelphia.

"This doesn't mean the subject will be any less controversial," Miller said, "but it does mean that we are again talking about issues such as slavery, freedom, race and fundamental identities."
Huh? Were there professors who were talking about the Civil War and not talking about slavery? Or are they just implying that teachers in secondary schools left it out? The historians feel that teachers are just supplying students with simplistic answers. As if that doesn't happen about every field in our schools today.
Ayers said it is time for both sides to face facts.

"We do understand the centrality of race and slavery in all of American history," Ayers said. "But we also understand that the stereotypes about the war are not accurate. The North did not go to war to bring slavery to an end . . . and without slavery there would have been no Confederacy.

"This means everybody needs to give up something. The self-righteousness of the North and the defensiveness of the white South. It's time."
Perhaps there are still teachers out there who are teaching those stereotypes Ayers bemoans. But if you look at any standard history textbook whether it is for middle or high school, I bet you would find the more nuanced picture. If there is one thing history textbooks do these days it is cover our racial past warts and all. They didn't need an African-American man in the White House to talk about the role of race in our nation's history. Perhaps students will pay more attention, but I've found that the Civil War is a subject that all students, no matter the race, are fascinated by and want to learn about what led up to the nation being torn apart and over 620,000 men dying before it is put back together.

But apparently freeing teachers up to teach a fuller picture of the Civil War isn't all that the Man is doing for us. Kids are behaving better in school.
Those in the know at Albany High greet each other by saying: “What’s up, my Obama?” and they respond to a sneeze with “Barack you.” Misbehavior is peer-corrected with the admonition, “Barack’s in the White House,” which translates, “Show some respect.”
If that keeps up, bless the man.

And he's even raising test scores and practically erasing the white-black achievement gap.
Now researchers have documented what they call an Obama effect, showing that a performance gap between African-Americans and whites on a 20-question test administered before Mr. Obama’s nomination all but disappeared when the exam was administered after his acceptance speech and again after the presidential election....

In total, 472 Americans — 84 blacks and 388 whites — took the exam. Both white and black test-takers ranged in age from 18 to 63, and their educational attainment ranged from high school dropout to Ph.D.

On the initial test last summer, whites on average correctly answered about 12 of 20 questions, compared with about 8.5 correct answers for blacks, Dr. Friedman said. But on the tests administered immediately after Mr. Obama’s nomination acceptance speech, and just after his election victory, black performance improved, rendering the white-black gap “statistically nonsignificant,” he said.
If this Barack effect translates to younger children, perhaps as children take tests across the land this Spring, we'll see the gap disappear altogether. Teachers might want to remind students right before the test that Barack is in the White House. Forget all those other education reforms; we have the solution right before us. We'll be able to drop affirmative action programs because now we have the magic charm to finally place black and white students on an even playing field. Who knew that Barack Obama in the White House would have such an immediate and all-encompassing impact?

Wednesday, April 29, 2009

Can government and unions run a car company?

Well, we're going to soon find out with the plans put forward for GM and Chrysler.
The United Auto Workers (UAW) would own 39% of GM. The federal government would own 50%. The creditors will be shafted with just 10%. (In the Chrysler plan being discussed, labor would own 55%, making it effectively a subsidiary of the UAW.)
Since everyone recognizes the role that the unions have played in the decline of the two companies, how are they going to improve and come out of this debacle as stronger, more profitable companies? What is going to happen when it comes time for the UAW to negotiate their next labor contract with a company that they own 39%? Do you think that an Obama-run administration would stand up to their demands? As Holman Jenkins points out, it has been the combination of government and union action in the past thirty years that has led these companies to the situation that they're now in.
Chrysler was bailed out directly with government loan guarantees; the Big Three all benefited from Reagan era "voluntary" quotas on Japanese imports to prop up domestic car prices. But these were temporary fixes. For more than 40 years, a 25% tariff has kept out foreign-built pickup trucks even as a studied loophole was created in fuel-economy regulations to let the Big Three develop a lucrative, protected niche in the "passenger truck" business.

This became the long-running unwritten deal. This was Washington's real auto policy.

For three decades, the Big Three were able to survive precisely because they skimped on quality and features in the money-losing sedans they were required under Congress's fuel economy rules to build in high-cost UAW factories. In return, Washington compensated them with the hothouse, politically protected opportunity to profit from pickups and SUVs.

Doesn't sound much like what you hear incessantly from your Congressman, about how Detroit's problems are all due to management "incompetence" in deciding to build "gas guzzling" SUVs, does it?

But then uncertain at this point is whether any legislator (other than John Dingell) remembers or grasps anymore Congress's own role. Yet the muddled, covert bailout continues: Washington's latest fuel-economy rules actually reward manufacturers for increasing the size and weight of some vehicles. The truck tariff remains in place. The fuel-mileage rules continue to protect the UAW monopoly by discouraging the Big Three from shipping small-car production offshore.

Lately some have doted, with wonderment and admiration, on the Obama administration's apparent willingness to drive a hard bargain with the UAW as it tries to impose a stage-managed replica of bankruptcy on GM and Chrysler. Please.

In a real bankruptcy, which is the natural fate of companies unable to meet their obligations, Chrysler and GM would be run (or liquidated) for the benefit of their creditors, not their workers. But, here, "pattern bargaining" will remain the law of the Detroit jungle. The UAW will continue to use its unnaturally augmented clout to extract uncompetitive pay and benefits (it can do no other given its internal incentives). As it has for 40 years, Washington will pitch in with one improvisation after another, disguised as energy policy, trade policy, health-care policy or environmental policy, to stop the rivets from popping off. Politics, especially Democratic electoral politics, will play a more dominant role than ever.

Look closely and the hidden subsidies to keep the dismal beast alive have already started flowing -- tax credits for UAW retirees to make up for reduced health-care benefits, loans to help Detroit "invest in green cars." And plenty more will be needed to sustain Obama Motors on life support, at least through the 2012 election.
Why would anyone invest money in these companies today? The ordinary bondholders are getting the shaft. As Larry Kudlow pointed out Monday,
The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.
Yes, up is down and down is up. But it's been that way for a long time in Detroit. Don't expect anything to change.

Will political expediency sell in Pennsylvania

Since Arlen Specter has made it very clear that the only reason he switched parties is because he was going to lose the GOP primary, we'll see how attractive such political cynicism will be to Pennsylvanian voters. It not totally obvious that the Democrats are going to clear out the primary for him.
The only Democratic candidate who entered the Senate race prior to Specter’s announcement is Joe Torsella, a former deputy mayor of Philadelphia who headed the National Constitution Center on the city’s Independence Mall.

Torsella, whose wife once worked for Specter on the Senate Judiciary Committee when the incumbent was its chairman, said in a statement that “nothing about today’s news regarding Sen. Specter changes ... my intention to run for the Democratic nomination to the Senate in 2010 — an election that is still a full year away.”

Democratic state Rep. Josh Shapiro, who had been weighing a Senate campaign, told the political Web site PoliticsPA that he would not run, saying Specter “is now the incumbent Democratic senator.”

....Former Rep. Joseph M. Hoeffel (1999-2005), who was Specter’s Democratic opponent in 2004, said there will be some Democrats who won’t be thrilled with Specter’s switch. But, Hoeffel added, “The bottom line is, I don’t think there will be a competitive Democratic primary now.”

Wearing a new party label after nearly 30 years in the Senate, Specter will have to persuade Pennsylvania Democrats that his party switch is sincere — and not, as Republican strategists allege, a desperate move attributed to his big early deficit to Toomey in GOP primary polls.
How can he convince them that his change was sincere when his own statement lays out the role that his primary poll numbers played in his decision?
Since then, I have traveled the State, talked to Republican leaders and office-holders and my supporters and I have carefully examined public opinion. It has become clear to me that the stimulus vote caused a schism which makes our differences irreconcilable. On this state of the record, I am unwilling to have my twenty-nine year Senate record judged by the Pennsylvania Republican primary electorate. I have not represented the Republican Party. I have represented the people of Pennsylvania.

I have decided to run for re-election in 2010 in the Democratic primary.

I am ready, willing and anxious to take on all comers and have my candidacy for re-election determined in a general election.

I deeply regret that I will be disappointing many friends and supporters. I can understand their disappointment. I am also disappointed that so many in the Party I have worked for for more than four decades do not want me to be their candidate. It is very painful on both sides.
But why would Pennsylvania Democrats who would be going into 2010 against Pat Toomey with a strong chance of victory choose a weasely Democrat/Republican/Democrat like Specter when they could pick a real Democrat for that seat? If anything, Specter could possibly be the weakest possible Democratic candidate that Toomey could face. I still think that Toomey loses, unless the economy is in a deep furrow next year and there has been a big backlash against Obama's economic policies. Specter would then bear the burden of having voted for those policies along with the distaste that many people might feel for a turncoat who went back on his strong promise just a month ago that he would not switch. And will Labor lie down quietly for Specter, who reiterated his opposition to Card Check in his statement today, when they could throw their support behind a more reliable pro-Union Democrat? Are they going to want to vote for a guy who supported Bush's judicial nominees and helped lead the fight for Clarence Thomas?

Mary Katherine Ham notes that two possible Democratic candidates for the Pennsylvania primary, who both sound like more attractive Democratic candidates than Specter, seem like they're ready for the fight.

This is still terribly demoralizing for the Republicans but it's not clear that this would change any actual vote in the Senate. Specter was always rather iffy and was already going to be a vote for Obama's budget and health care proposals. We'll see if he falls in with cloture votes with the rest of the Democrats. Meanwhile Bill Pascoe runs the numbers on Specter's ratings from the American Conservative Union and it turns out that there has only been one time when Specter's numbers moved strongly into conservative territory.
Arlen Specter's lifetime ACU rating is a left-of-center 44.47.

But that's not because Specter has moved, over the course of his career, from the right to the left.

As far as the ACU's Rating is concerned, he has always been on the left.
See the link for his numbers from his election in 1980.
Can Arlen Specter's ACU Ratings tell us anything, then?

Why, yes, they can.

Turns out Specter's highest-ever single-year ACU Rating was a 75 he scored in ... 2004, when he was being seriously challenged from the Right by one Pat Toomey.
We all know that he'd still be a Republican if he hadn't faced an impossible-to-win primary. That's just about what he told Mitch McConnell.
U.S. Senate Republican Leader Mitch McConnell issued the following statement Tuesday about Sen. Specter:

“Well, obviously we are not happy that Senator Specter has decided to become a Democrat. He visited with me in my office late yesterday afternoon and told me quite candidly that he’d been informed by his pollster that it would be impossible for him to be re-elected in Pennsylvania as a Republican because he could not win the primary. And he was also informed by his pollster that he could not get elected as an Independent and indicated that he had decided to become a Democrat.”
I assume that Specter's pollster already polled how Specter would do running as a Democrat. But answers in a poll question might be something totally different from real votes as Democrats absorb all the stories about why the guy switched and see the comparisons in the primaries to fresh Democratic faces. The irony will be if statements like that are enough to convince Pennsylvania Democratic Party primary voters that, instead of voting for a cynical and opportunistic Democrat, they'd prefer to vote for a real one.

UPDATE: John Henke checks out how leftist bloggers are reacting to Specter's switch. He comments,
Early reaction (Daily Kos, Glenn Greenwald, The New Republic, MyDD, Open Left) suggests Senator Arlen Specter has somehow managed to join a political Party that dislikes him even more than Republicans did. (See site for links) (Link via Instapundit)
This comment from Glenn Greenwald is typical.
Reports today suggest that Democratic officials promised Specter that the party establishment would support him, rather than a real Democrat, in a primary. If true, few events more vividly illustrate the complete lack of core beliefs of Democratic leaders, as well as the rapidly diminishing differences between the parties. Why would Democrats want a full-blooded Republican representing them in the blue state of Pennsylvania? Specter is highly likely to reprise the Joe Lieberman role for Democrats: a “Democrat” who leads the way in criticizing and blocking Democratic initiatives, forcing the party still further towards Republican policies.

(3) Arlen Specter is one of the worst, most soul-less, most belief-free individuals in politics.
And Jonathon Chait chimes in,
But I think it’s pretty clear that Specter is an unprincipled hack. If his best odds of keeping his Senate seat lay in joining the Communist party, he’d probably do that.


Hey, Glenn and Jonathon, Republicans would agree full-throatedly with you there.

And, apparently, people have recognized that Specter is an unprincipled hack for nigh on 40 years.
n his 1970 book "From Those Wonderful Folks Who Gave You Pearl Harbor," advertising legend Jerry Della Femina tells the story of trying to see Philadelphia District Attorney Arlen Specter:

"'Are you crazy?' his people said. 'Nobody gets to meet Arlen Spector [misspelling in original]. We can't even see him.' 'All right,' I said, 'what's Arlen Specter for?' 'Arlen Specter is for getting elected.' 'All right,' I said. 'What is Arlen Specter against?' 'Arlen Spector is against losing.'"
Ah, the one principle the Senator has - his own electoral success. Will that sell in the Democratic primary? And how will all the Republicans who switched parties last year in order to vote for either Hillary or Obama vote this election? That's going to be an interesting kicker. We'll have to wait and see.

I suppose that as a conservative, I'd have to pull for Specter to pull out a victory after a tough primary that perhaps would leave him damaged in an election against Pat Toomey. Even if Specter wins, he would still be a shakier vote for the Democrats in the Senate than a more principled Democrat. But there would still be a delightful schadenfreude in seeing him go down in the primary next year. So, from a pure entertainment perspective, this is going to be quite interesting.

Tuesday, April 28, 2009

Using Air Force One for a photo op

I don't blame Obama for the stupidity involved by some people in the White House Military Office deciding it was a fine idea to fly the plane up to New York just to get some fresh photos. I don't think that either he or his staff knew about this in advance or approved it.

It was dang stupid in the first place and doubly stupid to think that the public shouldn't be informed that there would be a jet flying around Ground Zero.

Even though it's unfair to tie this to Obama, this spoof from Congressman Darrell Issa's staff is quite funny.


The Air Force is now claiming that the cost of $328,835 for the flight doesn't really matter because they would have spent that time and money on a training flight. The fun of the photo op was just an extra benefit. I'm sure all those New Yorkers who were terrified yesterday to see a low-flying jet fly around Ground Zero feel so much better. And will they be even happier to learn that the FAA knew that this would scare people on the ground but went ahead anyway and still threatened New York officials if they told the public ahead of time.
Federal officials knew that sending two fighter jets and Air Force One to buzz ground zero and Lady Liberty might set off nightmarish fears of a 9/11 replay, but they still ordered the photo-op kept secret from the public.

In a memo obtained by CBS 2 HD the Federal Aviation Administration's James Johnston said the agency was aware of "the possibility of public concern regarding DOD (Department of Defense) aircraft flying at low altitudes" in an around New York City. But they demanded total secrecy from the NYPD, the Secret Service, the FBI and even the mayor's office and threatened federal sanctions if the secret got out.
(Link via JWF)How infuriating is it that these guys knew it would freak out the public but decided the need for a new photo was worth scaring everyone on a nice Monday morning? Will someone get fired for this?

The Truth Commission I'd like to see

I don't know why we're using a term from dictatorships, but as long as we're throwing around calls for a Truth Commission on the OLC memos and CIA interrogation techniques, the one Truth Commission I'd like to see sometime is to look at both how the Bush administration, the Obama administration, and the Federal Reserve pressured banks and other businesses in this economic crisis. The Wall Street Journal had the story of how Harry Lewis, the CEO of Bank of America, testified under oath that both Secretary Henry Paulson and Chairman Ben Bernanke pressured him to go ahead with the Bank of America takeover of Merrill Lynch even though BofA had uncovered information about billions of losses that Merrill Lynch was holding. He wanted to back out of the deal, but was forced to go ahead with the deal. And, even worse, they told him not to publicly disclose to BofA's shareholders the full information on Merrill Lynch.
Mr. Lewis has told investigators for New York Attorney General Andrew Cuomo that in December Mr. Paulson threatened him not to cancel a deal to buy Merrill Lynch. BofA had discovered billions of dollars in undisclosed Merrill losses, and Mr. Lewis was considering invoking his rights under a material adverse condition clause to kill the merger. But Washington decided that America's financial system couldn't withstand a Merrill failure, and that BofA had to risk its own solvency to save it. So then-Treasury Secretary Paulson, who says he was acting at the direction of Federal Reserve Chairman Bernanke, told Mr. Lewis that the feds would fire him and his board if they didn't complete the deal.

Mr. Paulson told Mr. Lewis that the government would provide cash from the Troubled Asset Relief Program (TARP) to help BofA swallow Merrill. But since the government didn't want to reveal this new federal investment until after the merger closed, Messrs. Paulson and Bernanke rejected Mr. Lewis's request to get their commitment in writing.

"We do not want a disclosable event," Mr. Lewis says Mr. Paulson told him. "We do not want a public disclosure." Imagine what would happen to a CEO who said that.

After getting the approval of his board, Mr. Lewis executed the Paulson-Bernanke order without informing his shareholders of the material events taking place at Merrill. The merger closed on January 1. But investors and taxpayers had to wait weeks to learn that the government had invested another $20 billion plus loan portfolio insurance in BofA, and that Merrill had lost a staggering $15 billion in the last three months of 2008.
So they threatened Lewis with his job, a threat he should have bravely dared them to go ahead and carry out, and then told him to avoid the regulations of disclosure that he was legally bound to make. Apparently, those pesky transparency regulations didn't apply to Paulson. And what did Tim Geithner, in his role as the head of the New York Fed and as one who was heavily involved in all this TARP and bank bailout planning know about this evasion of federal regulations?
Messrs. Bernanke and Paulson also undermined the transparency that is a vital source of investor confidence. Disclosure is not a luxury to be enjoyed only when markets are rising. It is the foundation of the American regulatory system and a reason investors have long sought to keep their money within U.S. borders. Could either man have believed that their actions wouldn't eventually come to light, with all of the repercussions for their bank rescue plans?

Mr. Paulson told Mr. Cuomo's investigators that he also kept former SEC Chairman Christopher Cox out of the loop while forcing BofA to rescue Merrill. Mr. Cox wasn't the only one. Mr. Paulson and Mr. Bernanke both sit on the Financial Stability Oversight Board, comprised of federal regulators who oversee TARP. Two days after Mr. Lewis told the dynamic duo that Merrill's losses were exploding and that he was looking for a way out, Mr. Bernanke chaired and Mr. Paulson attended a meeting of this board. Minutes of the meeting show no mention of BofA or Merrill.
And while we are having that Truth Commission. Let's have a true look at the problems of Freddie and Fannie Mae and the attempts to reform them that people like Barney Frank blocked. And here's another story that Todd Zywicki links to that displays another example of Henry Paulson abusing power as he frantically tried to contain the bank emergency. Fortune Magazine writes about Wells Fargo purchase of Wachovia and how Wells Fargo was forced by Paulson to take the TARP money even though the CEO, Dick Kovacevich, didn't want to do so.
Two weeks later, on Oct. 13, Kovacevich was sitting at a long conference table with eight other bank chiefs in Washington, listening to Treasury Secretary Hank Paulson tell them why they should take the government's money. Kovacevich says he protested, telling Paulson that compelling banks to accept TARP funds would lead to unintended consequences. It would erode confidence in the banking sector by making investors question the healthiest banks rather than instilling confidence in the neediest. Other industries undoubtedly would come to expect a bailout themselves. Still, Kovacevich took the money.

His displeasure leaked to the public, but what hasn't been reported is exactly how Paulson flipped the seasoned banker so quickly. In what an observer in the room describes as a "true Godfather moment," Paulson told all the assembled bankers, "Your regulator is sitting right there" - actually the industry's two biggest overlords were in attendance: John Dugan, comptroller of the currency, and FDIC chairwoman Sheila Bair - "and you're going to get a call tomorrow telling you you're undercapitalized and that you won't be able to raise money in the private markets."

For Kovacevich this broadside was the horse's head on his pillow. He and his bank were in an unfamiliar position of vulnerability. Wells had just agreed to buy Wachovia, a bank it had coveted for years, and it needed the government's approval - and, critically, the ability to raise money - to complete the deal. Reflecting on the episode with righteous indignation, Kovacevich points out that each of his warnings to Paulson was later validated. Yet he turns sheepish in explaining his decision. "You want to do what your country and your regulators want," he says quietly in his office, decorated with miniature replicas of Wells Fargo's iconic stagecoaches. "There was no ambiguity," he says, as to what was expected of him.
So here we have the Secretary of the Treasury telling one bank CEO not to make public vital information to his stockholders and then abusing his power by threatening another bank's CEO that, if he doesn't take the TARP money, that the Comptroller of the currency and FDIC chair will start telling the media that his bank is undercapitalized and thus torpedo their purchase of Wachovia. What an abuse of power.

And then I'd have the Truth Commission look at what was going on behind closed doors as Secretary Geithner determines whether or not to let banks pay back the unwanted TARP funds. And how they're stringing out releasing the information on the results of their stress tests.

One day we'll find out all sorts of these stories of how our government handled this economic crisis. It will be a bipartisan scandal about which government officials did what and knew what and how they interacted with private businesses to ward off a bigger meltdown. I can well sympathize with their fears that something big had to be done last fall to keep the whole financial system from melting down. But, if in the midst of this emergency, these government leaders violated laws and abused their power, we need to know about it. Isn't that the whole mindset behind the calls for investigating what went on in the Bush administration in the time after 9/11 when they feared another major attack on the United States? I am not saying that we should prosecute these officials. But we should know because the actions that they took then and now are influencing how businesses will interact with our government from now on. And we have witnessed a massive transfer of power from the private sector to the government. As John Hinderaker has a detailed post on what we're starting to learn about how Treasury has been handling TARP funds.
On April 21, the Special Inspector General for the Troubled Asset Relief Program Act of 2009--"SIGTARP"--submitted his quarterly report to Congress on his office's activities in relation to the TARP program. The report is a disquieting document that should be read by every American--certainly be every taxpayer.

The Inspector General's report documents the stunning and at least partly illegal expansion of TARP from the $700 billion originally allocated by Congress to what is now a $3 trillion complex of programs. This chart shows the various programs that are now included within SIGTARP's oversight, and how they have expanded from the initial $700 billion. Note that some of the programs are still incipient; $3 trillion is by no means a final number.
While Geithner asks for vast, new powers to regulate banks, by all means, let us look at how they've used the regulatory power they already have.

Of course, having some sort of Truth Commission run out of Congress might be problematic given who is in charge of the relevant committees there.
We probably won’t get any searching inquiries out of the banking industry’s elected overseers in Congress. Senate Banking Committee Chairman Christopher Dodd took V.I.P. loans from Countrywide Financial Corp., now a subsidiary of Bank of America. His counterpart in the House, Barney Frank, declared last July that Fannie Mae and Freddie Mac were “not in danger of going under,” about two months before they did.

Harry Reid has a gift

Apparently, Reid has some smart people around him who advise him when he's about to put his foot into his mouth. But then he goes ahead and does it anyway, while calling attention to the fact that he was warned not to say what he's about to say. Remember when, at the opening of the Capitol Hill Visitors Center when he ignored the advice of his staff to let loose this blooper.
"My staff tells me not to say this, but I'm going to say it anyway," said Reid in his remarks. "In the summer because of the heat and high humidity, you could literally smell the tourists coming into the Capitol. It may be descriptive but it's true."
Apparently, he never realized how commenting on the smell of the hoi polloi coming to see the "world's most deliberative body" would come off as snide and arrogant.

And now he's come out with a paperback version of his book, The Good Fight, that I'm sure there are fully dozens of people looking forward to reading. And he included a new chapter on "The Obama Era." In the book he includes this anecdote about Barack Obama that he seems to really like, but his wife warned him not to include it.
Reid said he was impressed when Obama, then a freshman senator from Illinois, delivered a speech about President George W. Bush's war policy.

Reid, D-Nev., writes: "'That speech was phenomenal, Barack,' I told him. And I will never forget his response. Without the barest hint of braggadocio or conceit, and with what I would describe as deep humility, he said quietly: 'I have a gift, Harry.'"

A copy of the book's 15-page epilogue was provided to The Associated Press. Reid said in an interview he hesitated about citing Obama's comment because he knew it could be interpreted as bragging.

"To be honest, my wife, she said, 'don't tell people that,'" Reid recalled. "She's afraid it could be taken the wrong way. But she's heard me tell lots of people that, and everytime she goes 'don't do that.' Now it's there for thousands of people to read."
Either Reid didn't realize how arrogantly confident this made Barack Obama seem or he enjoyed telling a story that would strike many people as displaying a less than perfect image of the President.

Perhaps one day Harry Reid will learn to listen to his advisers when they tell him not to say something stupid. But I sure hope not.

Speaking of what particular gift Barack Obama has, I think that Noemie Emery summed it up pretty well a month ago when she wrote that it was the "ideal" of Obama that people were drawn to rather than the actual person.
The idea of Obama has taken on a life of its own that exists quite apart from the actual man, and that has always been bigger, and much more alluring, than he. It is not what he does, but what he is and implies that has been so compelling, and one thing he is is not-white. Or he is half-white--a black man, who was brought up and raised by his mother's white family--which makes him still better: as a genetic mixture of Kenya and Kansas, he emerged as the literal symbol of national union, the two racial strains merged as one.

Anyone--your Colin Powell, your Michael Steele, your Condi Rice (who had a boomlet around 2006 in
Republican circles)--could break barriers (as John Kennedy did with religion some 40 years earlier), but only Obama could appear in this role of a tangible symbol, the word, or the ideal, made flesh. Penumbrae of mangers and bulrushes lurked in the background, sensed, if not said in the open.
People liked the idea of having the first mixed race president. They liked the idea of having someone who came out of the Ivy League and seems cool and hip so that reporters are now writing articles about how "hip" the guy is. And so the nation's elites were drawn to him. Because he has, well, a gift. A gift not like Harry Reid of making people recoil in distaste, but of making, as Emery writes, people feel better about themselves. First of all, you've proven how non-racist you are by supporting a nonwhite guy and also his coolness reflects your coolness.
He is, in effect, themselves only better, which explains his attraction for New York Times bloggers, and for their soulmates at Newsweek and Time. "These are people for whom the Obamas are not just a beacon .  .  . but .  .  . a kind of mirror," as Warner writes. "This is the first president I've known who looks, talks, and acts like a peer," as one man told her. "I feel like I understand what he's like and where's he coming from. .  .  . If you stopped the clock in 2004 .  .  . he'd feel roughly like a peer in terms of accomplishments. .  .  . Despite his incredible achievements, he still seems like a lot of people I know."

Believing the right is made up of dorks and bigots, liberals find the idea of Obama a tonic and twofer, allowing them to think well of themselves on two different levels--as the wonderful people who backed and elected our first nonwhite president; and as the wonderful people who set style everywhere, the ultimate last word in cool. Either would do, but the two put together--the messiah and model in one lissome package--was enough to make them go bonkers, and bonkers they went. "As a nation, we're shedding our childlike, rural innocence and becoming more mature, urban, urbane  .  .  .  dare I say it, sophisticated?" Joe Klein enthused, and went on to declare the Obama administration an astonishing triumph before it had started, and well in advance of the fact. So did Jonathan Alter, in spite of the fact that the stock market had only gone down with Obama's accession. "Chin up, everyone. This president is well poised to bring us back from the brink," he declared, just before Obama embarked on his first speech before Congress. How did Alter know this? Well, he just knew. Obama was so "naturally confident," so bold, and yet humble, so brainy (in the same way as Alter), so much the "smart, cool instructor, trusted by the class to explain."
Poor Harry Reid will never be cool. But he can say things that let us know what he really he thinks. And I suspect that, by including this little throwaway anecdote in his book, he's telling us that the thinks Obama is a mite bit too arrogant about his "gift" and that Reid knows it.

Monday, April 27, 2009

Roxana Saberi on a hunger strike

The brave American-Iranian journalist who has been jailed in Iran is now on a hunger strike.
Roxana Saberi, the Iranian- US journalist jailed for eight years in Iran on charges of spying for the US, has gone on hunger strike in protest at her sentence while her lawyer begins an appeal.

Waiting with flowers and a cake behind the doors of the jail, Reza Saberi, her father from North Dakota, hoped to see his daughter in the notorious Evin prison in Tehran on her birthday yesterday.

Mr Saberi said he had failed to convince her to stop the hunger strike even though she had already lost 4.5kg. "She looked very weak and said she would continue until she dies or is released from jail," he told the Financial Times. She was drinking water with sugar, he said.

However, Mr Saberi confirmed she had told him she was determined not to eat after the unexpectedly heavy sentence. "She told us on the phone that she went on hunger strike last Tuesday," he said. "We are worried about her health now and couldn't stop her."
Perhaps Ahmadinejad will realize that this has become a loser of an issue for Iran and that is why he pretended to George Stephanopolous that it is beyond his control.
I asked the president, as a goodwill gesture, if he would accept President Obama's word that she's not a spy, and also asked to go see her myself.

Fine with him, he said, but it's not his decision.

"Let's see if our judiciary allows for that, sure. But if they do not allow for that, no. I am afraid not," Ahmadinejad told me.

He sent me to the judiciary department. We made the request by phone right away and even went to the offices to make the request in person but we couldn't get beyond the gates.
Yeah, as if this wasn't choreographed ahead of time.

Isn't it about time for the benefits of Obama's charismatic engagement with foreign leaders to start kicking in?

How should the Census count the incarcerated?

Here's an interesting question: Where do incarcerated people live? Do they reside in prison or in the home they had before they were imprisoned? Why should this matter? Well, it does if you're conducting the census. The true location of prisoners has provoked an argument ahead of next year's census because it could make a difference for some rural legislative districts.
Elizabeth O'C. Little, a Republican state senator, represents a rural Upstate district larger in square miles than Rhode Island and Connecticut combined. But more than 13,500 of her constituents are not living there by choice, they could not vote for her if they wanted to, and most will leave the first chance they get.

Those unwilling constituents are incarcerated in one of 13 prisons -- 12 state and one federal -- that have given her district the nickname "Little Siberia." Without the prisoners, the district, which stretches to the Canadian border, may not have the minimum population required to earn a seat in the state Senate.

And while the inmates live behind bars, there is a recurring question as to whether prison is where they actually "reside."

In Little's opinion, the inmates reside in her 45th District, and her district is where they should be counted as residents during the 2010 Census.

"I think the inmates, like everyone, should be counted at their place of residence on that particular day," Little said. She said the inmates are no different than other temporary residents -- students living in dormitories, or developmentally disabled people in a center -- living away from their permanent addresses but counted where they reside on Census Day, April 1, 2010.

But for some civil liberties groups and the nonprofit Prison Policy Initiative, which has analyzed the last census numbers, counting inmates in prisons distorts population numbers in New York and several other states. Rural areas are shown to be more populous than they are, these critics say, while urban areas -- which produce most of the inmates -- are routinely under-counted.
Republicans representing these rural districts benefit by having the prisoners count as residents there; the NAACP and NYC Mayor Bloomberg want these prisoners counted as where they resided before their arrest - that would help urban areas which are represented by Democrats. The Census rules seem pretty clear on this question.
The Census Bureau has no plans to change the way it counts prisoners in 2010. Spokesman Robert Bernstein said, "We're following the concept of 'usual residence' -- where the person lives and sleeps most of the time."

Under the concept, as explained on the bureau's Web site, people who are temporarily away from their usual residence on Census Day -- vacationers or business travelers, for example -- will be counted as residents wherever they live "most of the time." People "without a usual residence . . . will be counted where they are staying on Census Day."

One problem with that method of counting, critics say, is that most prisoners do not stay in the area after their release. "More often than not, they go back to the community they came from," Shelton said.

An alternative would be to count prisoners at their last known address -- an approach favored by the NAACP and New York Mayor Michael R. Bloomberg (I).
Of course, how do you know that they will return to that last address? It's all guesswork and the Census is supposed to just be an "actual enumeration" not guesstimates. Of course, guesstimating is what a lot of liberals want to do with the Census when it comes to using statistical sampling to count the homeless since they think that it would increase the numbers in districts that would favor Democrats and would also channel more federal money to such locations.

It's a tough question. However, prisoners are not the only nonvoters who are counted for purposes of representation. Children and illegal immigrants are also counted. I'm sure that Republicans would be willing to trade the counting of prisoners by their prior home for the counting of illegal immigrants by their prior home. But that wouldn't serve the purpose of using the Census to also channel federal aid to these locations. So it seems better to follow the already delineated procedure rather than tinkering with it in order to obtain partisan advantage.

If Democrats are truly concerned, they can grant the inmates voting rights, which New York inmates currently lack.

What else is slipping through the cracks at Homeland Security

Jennifer Rubin highlights this tidbit from an ABC story about Homeland Security Secretary Janet Napolitano's apology session with US Vets for the report targeting right-wing extremists and returning vets as possible terror suspects.
A DHS official tells ABC News that the secretary met personally with Rehbein and issued a mea culpa. The official said Napolitano told Rehbein that "the report was poorly written. It didn't pass the standards of an internal review and therefore it shouldn't have gone out the door."

When pressed about how such an oversight could have occurred, the senior DHS official said that because of the massive size of the department -- more than 220,000 employees -- "sometimes things slip through the cracks," and that new internal processes have now been put in place to make sure such a mistake doesn't happen again.
When I first read of the report, my first reaction wasn't the outrage that many conservatives and veterans felt, though I certainly shared in that. I was wondering what possible use such a report sent out to police departments could be. It told them that there was a possibility of terrorism from right wing extremists.
The report states that while DHS "has no specific information that domestic rightwing terrorists are currently planning acts of violence...rightwing extremists may be gaining new recruits by playing on their fears about several emergent issues."
What were they supposed to do with such a warning? Target right wingers and returning vets for observation? What police department has the manpower to do that or the ability to convince a judge that there is probable cause for warrants to further investigate such people? It seemed like a totally useless report. Now the DHS Secretary admits that it didn't pass muster with the internal processes to guard against such a mistake. It makes one wonder how many other useless reports that are of no help whatsoever in offering concrete guidance to police departments that DHS is churning out. And what else is slipping through the cracks there?

As Jennifer Rubin comments,
220,000 employees in one department? That’s twice the size of the IRS and bigger than the Marines. You may recall those who raised concerns about creating a mammoth department thought DHS would become unmanageable and make us less secure. We now have a bureaucracy so big that “things slip through the cracks.” We can hope that what’s slipping through is just sloppy paperwork, but one suspects the problem is not limited to an errant report.

The biggest problem for DHS then may not be that its secretary did not know how the 9-11 terrorists got into the country. It has become what its critics feared: a jumble of agencies too big to manage and too disorganized to effectively do its job.
If you're concerned about the ability of DHS to maintain the country's security while also taking charge in cases of natural and health emergencies, never fear. The Obama administration wants to apply that special government touch to your health care.

Unreliable models for projecting the "green economy"

Before the Congress and Obama administration launch our economy on the track of their desired anti-global warming program, let's take a second look at the models that they're using to project the costs and outcomes of the program. Robert Samuelson casts a skeptical eye on their projections.
The trouble is that these models embody wildly unrealistic assumptions: there are no business cycles; the economy is always at "full employment"; strong growth is assumed, based on past growth rates; the economy automatically accommodates major changes -- if fossil fuel prices rise (as they would under anti-global warming laws), consumers quickly use less and new supplies of "clean energy" magically materialize.

There's no problem and costs are low, because the models say so. But the real world, of course, is different. Half the nation's electricity comes from coal. The costs of "carbon capture and sequestration" -- storing CO2 underground -- are uncertain, and if the technology can't be commercialized, coal plants will continue to emit or might need to be replaced by nuclear plants. Will Americans support a doubling or tripling of nuclear power? Could technical and construction obstacles be overcome in a timely way? Paralysis might lead to power brownouts or blackouts, which would penalize economic growth.

Countless practical difficulties would arise in trying to wean the U.S. economy from today's fossil fuels. One estimate done by economists at the Massachusetts Institute of Technology found that meeting most transportation needs in 2050 with locally produced biofuels would require "500 million acres of U.S. land, ... more than the total of current U.S. cropland." America would have to become a net food importer.

In truth, models have a dismal record of predicting major economic upheavals or their consequences. They didn't anticipate the present economic crisis. Earlier, they didn't predict the run-up in oil prices to almost $150 a barrel last year. In the 1970s, they didn't foresee runaway inflation. "General equilibrium" models can help evaluate different policy proposals by comparing them against a common baseline. But these models can't tell us how the economy will look in 10 or 20 years, because so much is assumed or ignored -- growth rates; financial and geopolitical crises; major bottlenecks; crippling inflation or unemployment.

The selling of the green economy involves much economic make-believe. Environmentalists not only maximize the dangers of global warming -- from rising sea levels to advancing tropical diseases. They also minimize the costs of dealing with it. Actually, no one involved in this debate really knows what the consequences or costs might be. All are inferred from models of uncertain reliability. Great schemes of economic and social engineering are proposed on shaky foundations of knowledge. Candor and common sense are in scarce supply.
Before we hurdle down this road, perhaps they should look at what more pessimistic models forecast as the costs and benefits of the green economy.

Transparency is all fine and good, except for unions

Although the Obama campaign talked a good game about how important transparency is, the administration is not so interested in the value of transparency when it comes to their union bosses.
rolling back rules requiring labor unions and their leaders to report information about their finances and compensation.

The Labor Department noted in a recent disclosure that "it would not be a good use of resources" to bring enforcement actions against union officials who do not comply with conflict of interest reporting rules passed in 2007. Instead, union officials will now be allowed to file older, less detailed conflict reports.

The regulation, known as the LM-30 rule, was at the heart of a lawsuit that the AFL-CIO filed against the department last year. One of the union attorneys in the case, Deborah Greenfield, is now a high-ranking deputy at Labor, who also worked on the Obama transition team on labor issues.

Labor officials declined to say whether she played a role in the new policy, noting that Ms. Greenfield is abiding by all government ethics rules. In court filings, she and other union attorneys called the 2007 rules "onerous."

The Labor Department also is rescinding another key labor financial disclosure regulation. The expansion of the so-called LM-2 rule, approved during the last days of the Bush administration, requires unions to report more information about finances and labor leaders' compensation on annual reports.
Sounds like a reverse revolving door - have those who are being regulated now in the government in the position to roll back those regulations. How convenient. Other union leaders now hold top jobs in the Department of Labor.
• Patrick Gaspard, White House political affairs director, who worked at the Service Employees International Union.

• T. Michael Kerr, who served as assistant to the secretary-treasurer at SEIU in charge of finance and administration before he was picked to serve as assistant secretary for administration and management at Labor.
Unions complain that compliance with disclosure regulations are too onerous. Funny how no one considers the burden of regulations when they're putting them on businesses. But for rank and file union members to find out how their dues are being spent, the administration is not so concerned.

AI vs. Ken Jennings: Bring it on!

How cool is this? IBM is announcing that they have are almost done developing a computer to compete on Jeopardy.
Indeed, the creators of the system — which the company refers to as Watson, after the I.B.M. founder, Thomas J. Watson Sr. — said they were not yet confident their system would be able to compete successfully on the show, on which human champions typically provide correct responses 85 percent of the time.

“The big goal is to get computers to be able to converse in human terms,” said the team leader, David A. Ferrucci, an I.B.M. artificial intelligence researcher. “And we’re not there yet.”

The team is aiming not at a true thinking machine but at a new class of software that can “understand” human questions and respond to them correctly. Such a program would have enormous economic implications.

Despite more than four decades of experimentation in artificial intelligence, scientists have made only modest progress until now toward building machines that can understand language and interact with humans.

The proposed contest is an effort by I.B.M. to prove that its researchers can make significant technical progress by picking “grand challenges” like its early chess foray. The new bid is based on three years of work by a team that has grown to 20 experts in fields like natural language processing, machine learning and information retrieval.
But can it manipulate the buzzer to successfully ring in first? That's the real secret of doing well on Jeopardy.

I say that they should do the showdown and put it on in primetime. All of mankind has an interest in the outcome of such a contest. While it's exciting to think of the advances in artificial intelligence, I would still have to pull for the hometeam - the human.

Sunday, April 26, 2009

Why are there limits on Teach for America teachers?

The Wall Street Journal writes about the limits that states and school districts put on the number of Teach for America teachers allowed in their schools.
Here's a quiz: Which of the following rejected more than 30,000 of the nation's top college seniors this month and put hundreds more on a waitlist? a) Harvard Law School; b) Goldman Sachs; or c) Teach for America.

If you've spent time on university campuses lately, you probably know the answer. Teach for America -- the privately funded program that sends college grads into America's poorest school districts for two years -- received 35,000 applications this year, up 42% from 2008. More than 11% of Ivy League seniors applied, including 35% of African-American seniors at Harvard. Teach for America has been gaining applicants since it was founded in 1990, but its popularity has exploded this year amid a tight job market.

So poor urban and rural school districts must be rejoicing, right? Hardly. Union and bureaucratic opposition is so strong that Teach for America is allotted a mere 3,800 teaching slots nationwide, or a little more than one in 10 of this year's applicants. Districts place a cap on the number of Teach for America teachers they will accept, typically between 10% and 30% of new hires. In the Washington area, that number is about 25% to 30%, but in Chicago, former home of Secretary of Education Arne Duncan, it is an embarrassing 10%.
This is such a shame. TFA pays for the training of these young, dedicated teachers and then places them in the most challenging situations. These young, often Ivy-League educated graduates vie for the opportunity to tackle teaching in some of the most at-risk schools in the nation. The program has been an amazing success. In fact, I had thought that the limit on the number of applicants accepted was designed as sort of a mechanism to increase the desirability of winning a place by creating a false scarcity. I should have known that teachers unions were the true cause. They can't stand the thought that anyone could become an excellent teacher without going through education programs.
This is a tragic lost opportunity. Teach for America picks up the $20,000 tab for the recruitment and training of each teacher, which saves public money. More important, the program feeds high-energy, high-IQ talent into a teaching profession that desperately needs it. Unions claim the recent grads lack the proper experience and commitment to a teaching career. But the Urban Institute has studied the program and found that "TFA status more than offsets any experience effects. Disadvantaged secondary students would be better off with TFA teachers, especially in math and science, than with fully licensed in-field teachers with three or more years of experience."

It's true that only 10% of Teach for America applicants say they would have gone into education through another route, but two-thirds stay in the field after their two years. One program benefit is that its participants don't have to pass the dreadful "education" courses that have nothing to do with what they'll be teaching. Those courses are loved by unions as a credentialing barrier that makes it harder to get into teaching.
I went through an education school because, at the time I became a teacher, there were few opportunities for lateral entry. I can well understand why someone would seek another way to become a teacher without sitting through useless classes. I've never met any teacher who thought that ed classes were of any value to them as teachers. Anything valuable that I learned in the program could have been summarized in a few weeks in a summer workshop. Which is, coincidentally, the training that is given to TFA teachers. I have known several TFA teachers and they have all, uniformly, been dedicated and talented teachers. What a shame that there should be artificial limits placed on the number of such teachers allowed in any school district. Why have we allowed our education system to have gotten into the state that the interests of the teachers unions is what drives policy in our schools?

UPDATE: Here's a story from Boston on the resistance to TFA teachers in light of the cuts necessitated by the recession.
Boston officials say the recruits will help fill 100 to 200 vacancies created by retirements and resignations in subjects or grade levels where layoffs will not occur. Those slots cannot go to the teachers losing their jobs in other program areas, they said, because they lack proper state certification to teach in those disciplines.

While Teach for America recruits are not fully certified, they often have a bachelor's degree in the subjects they are asked to teach, arming them with greater content knowledge than, perhaps, a veteran teacher who did not major in that subject in college.

"We absolutely do not plan to bring recruits into program areas where we would have layoffs," said William Horwath, acting assistant superintendent for human resources in the Boston public schools.

The argument reflects a national debate over Teach for America, a nearly 20-year-old community service program that enlists soon-to-be college graduates into the teaching ranks with the hope that they make the profession a career. This year the program has experienced a 42 percent surge in applications as college seniors, some inspired by President Obama's call to public service, confront one of the worst job markets in years.

But many teachers' unions and some education observers accuse the recruits of merely padding their resume and then fleeing the classroom at the expiration of their two-year commitment. That has prompted some critics to dub the program "teach for a while." They contend that the recruits lack proper training because most have not gone through traditional teacher training programs in college, instead receiving just five intensive weeks of summer training.

In Detroit, the teachers' union is trying to block an effort by some education advocacy groups to revive that city's Teach for America program after it shut down about five years ago amid municipal budget cuts, shrinking school enrollment, and fierce union opposition.

"We don't need educational mercenaries," said Keith Johnson, the union's president. "We don't feel people can ride in on their white horses and for two years share the virtue of their knowledge as a pit stop on their way to becoming corporate executives. Some don't last their first year."

In spite of teacher layoffs sweeping across the country, the program expects to fill a slightly higher number of slots in the fall, including its first positions in Cambridge and Chelsea. Union officials in those two cities could not be reached for comment.

Many school districts find the program extremely helpful in recruiting teachers for hard-to-fill areas - such as math, science, special education, and English as a second language instruction - or tough classroom assignments at low-performing schools, where students with a host of needs can create educational and disciplinary challenges.

In an Urban Institute study that examined North Carolina high schools between 2000 and 2007, Teach for America recruits were found to be more effective than teachers from traditional teacher training schools in boosting student achievement. The report, released this month, attributed some success to the strong academic credentials of the recruits, but acknowledged that many of the recruits teach for only a few years.
Consider that languate - "educational mercenaries." Is that the language of someone who has the best interests of the students in mind or preserving jobs of union members? Perhaps it would help to read some of these points from a Myth vs Realities argument from Teach for America advocates. And also the results of research into the efficacy of the program. Perhaps there is something in the idea that putting an intelligent and dedicated teacher with a degree in the subject being taught in a classroom might outrank putting someone with an education degree, but no degree in the content into the classroom. This is one advantage that charter schools have over the traditional public schools; they can hire teachers who follow a less conventional pathway to the classroom. It is time for state legislatures to, as the Detroit News editorializes for Michigan's legislature, to loosen up restrictions on how one may become a teacher.
New Detroit Federation of Teachers union President Keith Johnson often says he wants the most talented teachers in Detroit classrooms. He needs to back up his verbal commitment with action. He can start by supporting Teach for America.

A trickier obstacle: Michigan doesn't allow people to become teachers through an alternative pathway such as Teach for America's rigorous training program, rather than a traditional teacher certification program. (The nonprofit wants such a pathway because many of its members still want to teach after they finish their two-year service.)

Granholm should push policymakers to quickly address this problem by pointing out that traditional teacher-preparation programs do not equate with teacher quality.

Michigan should be moving toward a teacher certification system that weighs teachers' impact on student achievement, rather than on the classes that they take.
Amen! Ask any experienced teacher about those ed classes they took and whether that material could have been successfully condensed into a summer program.

As the Washington Post noted in December, applicants for the program are way up in part due to the economy, but also because of the program's record as one of the premier outlets for young people who want to become involved in helping helping others.
"Teach for America may fit a perfect niche," said Peter Levine, director of a research center on civic engagement at Tufts University. "You get to work on a social problem on the public payroll, but you're going through a nonprofit, which many young people prefer to working for the government."
Our leaders are always talking about the importance of young people learning to give back to their communities as well as the crucial role of teachers in our society. Let them now put their votes where their mouths are and drop restrictions that limit this estimable program. And while they're at, they could consider why the education establishment is putting up roadblocks to this worthy program.

Here is more on TFA and the Detroit schools from The Blog Prof.

A teeny chick coming home to roost

With all the stories out there of Congressman Murtha snagging earmarks for his contributors, his colleagues are getting a mite bit touchy about being associated with his old-fashioned brand of paying to play with the big boys. And so he's seen a chipping away at his power.
So powerful was Representative John P. Murtha at one time that he used to put up billboards in his Western Pennsylvania district declaring that “the P is for Power.” Few in Congress dared disagree: he doled out or withheld billions in federal money each year for lawmakers’ pet projects, better known as earmarks.

Now, however, a string of federal criminal investigations of contractors or lobbyists close to Mr. Murtha, the top Democrat on the defense appropriations subcommittee, are threatening to undermine his backroom clout.

In the weeks since the news that prosecutors had raided the offices of the PMA Group — a lobbying firm founded by a former Murtha associate that became a gateway to his office and his biggest source of campaign money — about two dozen rank-and-file Democrats have risked his wrath by calling for a House ethics investigation of the matter. One Democrat has even foresworn seeking earmarks for the military contractors in his district because of ethical concerns about the process.

In a private meeting with the chairman of the House appropriations committee, Mr. Murtha, the unofficial leader of the “old bulls” who oversee the subcommittees, was forced to accept a series of new restrictions on his authority to grant earmarks, Democratic aides briefed on the meeting said. In previous weeks he had already acquiesced to another steep cut in the volume of earmarks he dispenses, down by half this year from a few years ago. He had also submitted to new disclosure requirements, including public hearings, that cramp his ability to cut last-minute deals.

Now Mr. Murtha also agreed to accept a new rule requiring competitive bidding on earmarked contracts. Furthermore, one of his usual lieutenants — Representative Peter J. Visclosky, Democrat of Indiana and member of the defense subcommittee who is chairman of the energy and water panel — unexpectedly switched sides to back the new restrictions, perhaps because he too is under new scrutiny for his ties to the PMA Group.
He's still very powerful, of course; any subcommittee chairman in Appropriations holds a lot of power. But all those scandals are beginning to pile up and they all follow the same pattern.
Mr. Murtha has continued his spring tradition of summoning military lobbyists to a big-ticket fund-raising breakfast just as he begins to oversee the year’s military spending bill. And he has vowed to continue steering military contracts to his constituents. “If I am corrupt,” he recently told The Pittsburgh Post-Gazette, “it is because I take care of my district.”

Other Democrats winced at his words. Reports of the PMA investigation coincided with the news that federal agents had also raided Kuchera Industries, a Johnstown, Pa., company built on Mr. Murtha’s patronage whose owners held a fund-raiser for him on their private game ranch. The Justice Department is also investigating the Concurrent Technologies Corporation, a nonprofit government contractor based in Johnstown that was founded by Mr. Murtha, nurtured by his earmarks and represented by PMA lobbyists....

This week, Fred Wertheimer, a veteran advocate for stricter ethics rules, and others are expected to formally ask the ethics committee to investigate Mr. Murtha, a handful of other lawmakers close to him, and the possibility that they traded earmarks for contributions and other benefits from the PMA Group.

Meanwhile, shortly after the PMA investigation become public, more than 100 lobbyists and contractors lined up in late February to shake Mr. Murtha’s hand in the receiving line at his annual breakfast fund-raiser at the Army-Navy Country Club in Arlington, Va. Many lobbyists say they consider it obligatory. (Susan O’Neill, Mr. Murtha’s chief fund-raiser, rounded up lobbyists last year with an e-mail message that all but suggested the chairman would take attendance. “I wanted to be sure that you are attending,” she wrote, adding, “I am enclosing the invitation in case you did not receive it,” and, “My office will call to confirm receipt if we do not hear back from you.”)

About 25 companies received more than $100 million in Mr. Murtha’s earmarks in the current military bill while their executives contributed more than $350,000 to his campaign.
The eye-opening thing is that this is all legal as long as nothing explicit was said between all these experienced Washington hands to indicate that what was going on was really a quid pro quo. Winks and nods are accepted, however.

Saturday, April 25, 2009

Televising the Supreme Court hearings

Testifying before the House Appropriations Committee this week, Justices Thomas and Breyer indicated that there was still disagreement among the justices about televising Court hearings. Justice Breyer expressed this concern.
Breyer said oral arguments before the court represent a very small portion of its work and expressed concern that broadcasts of the arguments could mislead viewers.

"People relate to people," Breyer said. "Would they know that it's 2%t of the matter they're seeing?"

Breyer suggested that "serious social science research" could determine whether broadcasts would add or detract from people's understandings of the court's functioning.

"My own view is that you have to be very careful about proceeding on this until you know a few answers," Breyer said.
This seems like such a straw man argument. Most of the real work in the House and Senate is not shown. We don't get to see those backroom meetings where the deals are made. We are not sitting in on the conference committee meetings where the final bills are crafted. We don't get to see the president meeting with House and Senate leaders and negotiating the form that legislation will take. We don't get to see interest group lobbyists meeting with representatives and pushing their requests. And the American people can cope with just seeing what is broadcast on C-Span. So I think we're mature enough to cope with seeing the Supreme Court hearings. Sure, I'd like to be able to listen in on all the backroom discussions on both Capitol Hill and at the Supreme Court. But that doesn't mean that what I do get to hear and watch is any less important. And now with so many court reporters who can post long stories on the web recounting the questions from hearings and the audio that gets released, there really isn't any reason not to go all the way and allow the hearings to be televised. People are interested and it's our government. It's one-third our government and sometimes the most important branch. We deserve to hear them in their public moments.

How Porter Goss would testify

If they hold the congressional hearings that they seem set to hold on the CIA's interrogation techniques, expect Porter Goss, as a former chairman of the House Intelligence Committee and former head of the CIA, to be called to testify about what the top congressional members who were briefed on the techniques were told. And he has a column in today's Washington Post indicating that Nancy Pelosi's "I knew nuffink" pose is a total sham.
Let me be clear. It is my recollection that:

-- The chairs and the ranking minority members of the House and Senate intelligence committees, known as the Gang of Four, were briefed that the CIA was holding and interrogating high-value terrorists.

-- We understood what the CIA was doing.

-- We gave the CIA our bipartisan support.

-- We gave the CIA funding to carry out its activities.

-- On a bipartisan basis, we asked if the CIA needed more support from Congress to carry out its mission against al-Qaeda.

I do not recall a single objection from my colleagues. They did not vote to stop authorizing CIA funding. And for those who now reveal filed "memorandums for the record" suggesting concern, real concern should have been expressed immediately -- to the committee chairs, the briefers, the House speaker or minority leader, the CIA director or the president's national security adviser -- and not quietly filed away in case the day came when the political winds shifted. [He's talking about Jane Harman here.] And shifted they have.
The time to express their moral outrage and opposition to such techniques was at the time, before those methods were being used, not seven years later when it now seems to be to their partisan advantage to have selective memories. What a weasel Nancy Pelosi is! And she is so incredibly arrogant that she thought she could mau mau for openness and hearings without her own role coming to light.

Friday, April 24, 2009

Lack of history on the History Channel

This is funny yet so true.
History Channel Programming Line-Up
see more Funny Graphs
There is so much history that would be fascinating to see depicted on the History Channel. But it seems that any time I flip through, they're doing Modern Marvels or Ice Machines or Earthmoving machines. It's basically info that would appeal to a toddler boy playing with his toy trucks. And when they do discuss military history they're either running documentaries from 40 years ago or tarting it up to look like the movie "300." It's such a disappointment.

Congratulations to my Quiz Bowl team

On Wednesday, we participated in a nationwide quiz bowl competition called the Knowledge Master Open. The way this competition works is that a multiple choice question is flashed on the screen. Working as a team with one student at the keyboard the kids try to answer the question correctly and as fast as they can. They get points for being correct and for how fast they can answer the question. As you might imagine, it can be tough to get 15 high schoolers to come rapidly to a consensus under this time pressure. The questions range from tough to very tough on all subjects from physics to ancient history. Some involve math which is especially hard to do under time pressure.

Well, our team placed first in the country this time with a score of 1827 out of a possible 2000 points! We are exceptionally thrilled. It was a joy to watch the kids working together with everyone contributing at least one right answer to the 200 questions. Some of our kids know the science; others are the history geeks. It was true teamwork in action and I'm very, very proud to be their coach.

The second place team was State College High School in Pennsylvania with a score of 1811. And third place went to our home state rival, North Carolina School of Science and Math. The results are here. You can try yourself out on sample questions here.

Get ready for health care rationing

Charles Krauthammer points out that the inevitable end of Obama's plans on Medicare will lead straight to health care rationing.
The hard part is Medicare and Medicaid. In an aging population, how do you keep them from blowing up the budget? There is only one answer: rationing.

Why do you think the stimulus package pours $1.1 billion into medical "comparative effectiveness research"? It is the perfect setup for rationing. Once you establish what is "best practice" for expensive operations, medical tests and aggressive therapies, you've laid the premise for funding some and denying others.

It is estimated that a third to a half of one's lifetime health costs are consumed in the last six months of life. Accordingly, Britain's National Health Service can deny treatments it deems not cost-effective -- and if you're old and infirm, the cost-effectiveness of treating you plummets. In Canada, they ration by queuing. You can wait forever for so-called elective procedures like hip replacements.

Rationing is not quite as alien to America as we think. We already ration kidneys and hearts for transplant according to survivability criteria as well as by queuing. A nationalized health insurance system would ration everything from MRIs to intensive care by myriad similar criteria.

The more acute thinkers on the left can see rationing coming, provoking Slate blogger Mickey Kaus to warn of the political danger. "Isn't it an epic mistake to try to sell Democratic health care reform on this basis? Possible sales pitch: 'Our plan will deny you unnecessary treatments!' . . . Is that really why the middle class will sign on to a revolutionary multitrillion-dollar shift in spending -- so the government can decide their life or health 'is not worth the price'?"
Before we go down that road, there are other alternatives that should be debated. Krauthammer proposes one that would lower costs and not involve government rationing.
My own preference is for a highly competitive, privatized health insurance system with a government-subsidized transition to portability, breaking the absurd and ruinous link between health insurance and employment. But if you believe that health care is a public good to be guaranteed by the state, then a single-payer system is the next best alternative. Unfortunately, it is fiscally unsustainable without rationing.
People need to understand the end result of the Democrats' proposal. As Krauthammer points out, all we're hearing now is about all the good stuff that we'll gain from a single-payer plan. But the reason why politicians hesitate to delve deeply into health care reform is because the choices are not pleasant. And the only way to pay for it all will be by limiting what care people can receive.

Thursday, April 23, 2009

Rediscovering the value of free trade

During the presidential campaign, Obama catered to his union supporters by denouncing the idea of a free trade agreement with Colombia. Now that he's president, this is one of his campaign promises that he appears to be willing to break. Thank goodness. There is no reason to oppose that agreement besides the unions and Democrats' false arguments about protecting trade unionists in Colombia. President Uribe has done more than any Colombian leader had done previously to cut down the violence against all civilians including trade unionists. And the results have been dramatic. And the agreement would help American industry because it would open up Colombia for American exports. A company like Caterpillar, which just reported steep losses in the first quarter. President Obama had singled out Caterpillar as one of the industries that would directly benefit from his stimulus package. The CEO supported Obama and is a member of the President's Economic Recovery Advisory Board but now has harsh words for the stimulus.
“The infrastructure portion of the stimulus package was disappointing in that it was less aggressive than other countries and missed an opportunity to correct past underinvestment in U.S. infrastructure,” Caterpillar said in economic commentary with today’s first-quarter earnings report.
However, there are indications that the Colombian Free Trade Agreement that Obama opposed as a Senator and a candidate now has his support to be moved forward. And this will help Colombia as the WSJ explained a year ago when the Democrats were killing the free trade deal.
Exhibit A are 8,600 jobs at two Caterpillar Inc. factories in Illinois. Caterpillar exports more to Peru and Colombia than it does to Germany, Japan or the United Kingdom. So keeping and growing market share in both countries is important to union members in both plants. Not all are union jobs but both facilities are United Auto Worker shops.

Consider exports of the off-highway truck, made in Decatur. Customers in Colombia now pay a 15% tariff – equal to $200,000 – on the import of these vehicles. If the FTA goes through, that import tariff goes to zero immediately. Conversely, if the deal dies and Colombia, which is trying to expand its world trade, strikes an agreement with another country where similar vehicles are made, U.S. exports will immediately be at a 15% price disadvantage.

Colombia also has a large mining industry, and there are more Cat D-11 bulldozers in Colombian coal mines today than in any other country in the world. Those bulldozers are made in East Peoria. Colombian customers pay a 5% duty to import Cat bulldozers, which compete against Komatsu bulldozers made in Japan. Union members might ask Mr. Sweeney why he wants to spurn an offer that would give U.S. products a 5% price edge against Japanese competition.

Caterpillar – which has a total U.S. work force of 50,545 – faces an even more imminent threat in the case of its motor graders, a piece of heavy equipment used to level the playing field, literally. A company called Champion also makes motor graders in Canada, and Colombia is also negotiating an FTA with Canada. If Canada seals a deal with Colombia while the U.S. walks away from its Colombia pact, graders made in the U.S. will cost more than those made in Canada. Once again, Mr. Sweeney's agenda makes the U.S. work force less competitive.
During a deep recession such as we're in is exactly the wrong time to retreat to a protectionist crouch. So it is very good news that the Obama administration has changed its tune on free trade since taking office.
Since taking office, Mr. Obama has struck a more-positive tone on free trade than he often did during the campaign. He and aides have spoken out against protectionism, and in Mexico last week he declined to raise the question of renegotiating the North American Free Trade Agreement, despite a pledge to do so last year.

In October, then-Sen. Obama expressed deep concerns over the Colombian pact. "The history in Colombia right now is that labor leaders have been targeted for assassination on a fairly consistent basis and there have not been prosecutions," he said during a presidential debate.

Saturday's lunch conversation with Mr. Uribe was "fruitful," said Denis McDonough, director of strategic communications for the National Security Council.

Mr. Obama sent U.S. Trade Representative Ron Kirk to meet with Mr. Uribe Friday and with the Colombian finance minister Saturday to discuss the pending agreement.
This is indeed good news. Let's see if the unions let the Democrats make this switch.

The one program Obama can find to cut

George Will is devastating today about the black humor of President Obama's order to his cabinet to find $100 million dollars to cut from their budgets.
Monday morning the government braced for austerity, as the government understands that. Having sent Congress a $3.5 trillion budget, the president signaled in advance -- perhaps so his Cabinet members could steel themselves for the new asceticism -- that at the first meeting of his Cabinet he would direct the 15 heads of departments to find economies totaling $100 million, which is about 13 minutes of federal spending, and 0.0029 percent -- about a quarter of one-hundredth of 1 percent -- of $3.5 trillion.
But there is one tiny program that Democrats are happy to cut - vouchers for inner-city, minority school children stuck in the District of Columbia's miserable school system.
The president has set an example for his Cabinet. He has ladled a trillion or so dollars ("or so" is today's shorthand for "give or take a few hundreds of billions") hither and yon, but while ladling he has, or thinks he has, saved about $15 million by killing, or trying to kill, a tiny program that this year is enabling about 1,715 D.C. children (90 percent black, 9 percent Hispanic) to escape from the District's failing public schools and enroll in private schools.

The District's mayor and school superintendent support the program. But the president has vowed to kill programs that "don't work." He has looked high and low and -- lo and behold -- has found one. By uncanny coincidence, it is detested by the teachers unions that gave approximately four times $15 million to Democratic candidates and liberal causes last year.

Not content with seeing the program set to die after the 2009-10 school year, Education Secretary Arne Duncan (former head of Chicago's school system, which never enrolled an Obama child) gratuitously dashed even the limited hopes of another 200 children and their parents. Duncan, who has sensibly chosen to live with his wife and two children in Virginia rather than in the District, rescinded the scholarships already awarded to those children for the final year of the program, beginning in September. He was, you understand, thinking only of the children and their parents: He would spare them the turmoil of being forced by, well, Duncan and other Democrats to return to terrible public schools after a tantalizing one-year taste of something better. Call that compassionate liberalism.

After Congress debated the program, the Education Department released -- on a Friday afternoon, a news cemetery -- a congressionally mandated study showing that, measured by student improvement and parental satisfaction, the District's program works. The department could not suppress the Heritage Foundation's report that 38 percent of members of Congress sent or are sending their children to private schools.

The Senate voted 58 to 39 to kill the program. Heritage reports that if the senators who have exercised their ability to choose private schools had voted to continue the program that allows less-privileged parents to make that choice for their children, the program would have been preserved.
Remember this story next time you see Democrats mouthing platitudes about how they care about results-based programs to improve education. If they truly cared, they'd be debating how much to expand this successful program. But all those hypocrites care about is making teachers unions happy.

Forgotten prisoners

I was just covering the 1970s with my history students and we got to discussing the Helsinki Accords. And while I was telling them about the human rights elements of the agreement and the effect it had on galvanizing those suffering in Soviet prisons and fighting for civil rights behind the Iron Curtain I couldn't help thinking of how we've lost that concern for prisoners of conscience the world over. I remember, as a teenager at the time, how we knew the names of some of the more prominent prisoners of the Soviet gulags. Many people wore bracelets with their names. Today, teenagers are so much more likely to go out protesting against our own country than in support of those being held in prison by the dictators of the world. Yes, they care deeply about suffering in Darfur, but they don't seem to even know that there are such prisoners being held today by some of the same leaders that they see on the world stage.

Daniel Henninger expresses that thought today in the context of what a PR coup it is for such dictators as Hugo Chavez to get their photo ops with President Obama or with the Congressional Black Caucus while no mention is made of what these men have done to civil liberties in their own homes.
The origin of the change-from-below movement was the 1975 Helsinki Accords, which ratified the legitimacy of self-determination. There was no stronger supporter of this liberal turn than AFL-CIO President Lane Kirkland. Where is his like today in the Democratic Party or its unions? Where is the left-wing blogosphere when the pro-democracy prisoners of Cuba, Iran and Syria need them? It's ranting about Bush "war criminals."
And here is a reminder of what is going on in these countries.
Hugo Chávez is a tin-pot dictator who has debauched Venezuela's democracy. Normally in such circumstances, an American president would show reserve. The weirdly ebullient Mr. Obama did not, and that image was the photo seen 'round the world.

In New York this week, I asked a former Eastern European dissident who spent time in prison under the Communists: "If you were sitting in a cell in Cuba, Iran or Syria and saw this photo of a smiling American president shaking hands with a smiling Hugo Chávez, what would you think?"

He said: "I would think that I was losing ground."

The hopeful way to view the Obama administration's openings to Chávez, the Castros, Iran and the others would be: This had better work. Because if it doesn't, a lot of people who've spent years working in opposition to these regimes -- in hiding or in prison in Iran, Syria, Cuba, Venezuela, China, Russia, Burma, Libya, Egypt, Sudan, Zimbabwe, Uzbekistan -- are going to get hammered. North Korea's opposition is invisible.

Other than physically controlling their populations, the biggest problem for autocrats -- most of them narcissistic monomaniacs -- is maintaining the legitimacy of their authority, which by definition is always on thin ice. To Mr. Obama and his handlers perhaps it was just a photo-op. For Mr. Chávez it was priceless. Merely being seen or photographed in the presence of civilized society -- at summits, negotiations, in state visits -- empowers the autocrat and discourages his opposition.

Within days of the Summit of the Americas, former Venezuelan presidential candidate Manuel Rosales formally applied for asylum in Peru, fearing a corruption trial at home.

When Barack Obama was a candidate for president, the main plank of his foreign policy, other than withdrawing from Iraq, was agreeing to "talk to our enemies," notably Iran and Syria. The intellectual rationale for this policy, as far as one can make out, is that because George W. Bush wouldn't commit the office of the presidency itself to direct negotiations with the leaders of these regimes, and because everything George W. Bush did was wrong, reversing that policy would bear fruit.

Iran just sentenced Iranian-American journalist Roxana Saberi to eight years in prison. Syria's leading pro-democracy dissident, Riad Seif, has spent the last year in Adra prison and is reportedly dying of prostate cancer. Syrian "president" Bashar Assad won't let him leave the country to get treatment.

In Cuba, Dr. Oscar Elias Biscet is serving a 25-year prison sentence. In China, the whereabouts is unknown of Liu Xiaobo, co-author of a new, online pro-democracy petition. His wife has written to Mr. Obama for help. Tens of thousands of North Koreans are hiding in China.

The Obama people seem to believe that talking top guy to top guy is the yellow brick road to progress. Why do they think that? They say Ronald Reagan negotiated over nuclear arsenals at Reykjavik. But virtually all desirable regime change in our time -- Soviet Communism, South Africa, the Philippines -- has come mainly from below, from the West protecting and supporting people in opposition to autocrats.
It would be nice if today's leaders would make these names famous and make it clear that we support those laboring for freedom in their own countries just as we supported prisoners of the Soviet regimes during the Cold War.