GM pays back $6.7B in government loans using $13.4B of government money parked in an escrow account in order to secure $10B in new government loans.

UPDATED: 01-May-10
All week I've watched GM CEO Ed Whitacre walking down a factory floor in a GM advertisement, crowing about repaying government loans while saying he could respect the opinion of those who did not want to give GM a "second chance". It is good to know that Ed can respect my opinion of the bailout. He might be interested to know that my current opinion is that his claim that GM repaid the loan from the US Government in full and ahead of schedule is complete horseshit. I hope Ed still respects me.

Shikha Dalmia at Forbes goes beyond opinion and actually does the homework:

GM CEO Ed Whitacre announced in a Wall Street Journal column Wednesday that his company has paid back its government bailout loan "in full, with interest, years ahead of schedule." He is even running TV ads on all major networks to that effect--a needless expense given that a credulous media is only too happy to parrot his claims for free. Detroit Free Press' Mike Thompson, for example, advises bailout proponents to start "warming up their vocal chords" to jeer their opponents with chants of "I told you so."

I wonder - Does Mike Thompson really believe that anyone beside himself would uncritically take the GM PR, advertising, and administration spin at face value and say "I told you so!" C'mon, Mike. Who would do that?

But I digress. Shika explains how the shell game worked:

"...the Obama administration handed GM only $6.7 billion as a pure loan... The vast bulk of the bailout money [$49.5B] was transferred to GM through the purchase of 60.8% equity stake in the company--arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return."

"...the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan."

"...the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government's tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new--and bigger--DOE loan much more feasible."

I said this was like a carny shell game, but that is not fair - to the shell game. In a shell game a bean is presumed to be placed under one of three cups, and the mark is fooled by quick manipulation of the cups into guessing and betting incorrectly where it might be found.

In GM's case, the administration just keeps stuffing more and more of our money into the company's pockets, the company moves some of the money from one pocket to another, gives a little back, and finally both the company and administration that gave them our money misrepresent what is taking place. When all is said and done, GM winds up owing us more money than before they "repaid" the loan.

But, no worries. We'll get the money all back. Someday. Over the rainbow. Just as soon as the 72.5% of GM company stock that US and Canadian taxpayers own is worth as much as they are owed and can be safely sold to repay it. The GAO suggests this may happen just as soon as....

" It concluded in a December report (which a more recent April report has said nothing to contradict, despite media spin to the contrary) that: "The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially more than they have in the past."

... hell freezes over.

Hat tip to McQ at Questions and Observations who sums it up with this depressing observation:

"...it's actually worse than first imagined."

In the meantime, as taxpayers, we can take comfort in the knowledge that our money is being used to prop up a failed competitor and make life harder for the Ford Corporation. Ford is a well run American company that took the hard management decisions necessary to survive in a tough environment and made the right management decisions to earn the respect of all Americans. Ford continues to innovate and build new products out of their own capital and profits, not requiring or requesting any government handouts. And we are all paying to subsidize their competitors.

We can all sleep better knowing that our tax dollars are being used to undermine a great American company that did the right thing by reanimating their zombie competitors.

I guess I'll just have to be satisfied with the knowledge that since GM and Chrysler took my money against my will, they'll never get a dollar from me willingly to buy one of their cars. It's something.

UPDATE: 01-May-10
Nick Gillespie at Reason TV distills the scam into an easily digestible 90 second video:




H/T to Fausta, who also weighed in with a post explaining how "GM Paid Nothing". The real question, for me, is why does the media for the most part simply regurgitate such a transparent misrepresentation of the facts?

Divided and Balanced.™
Now that is fair.

The Carnival of Divided Government Triginta Septendecim (XXXVII) Special 4 Year Blogiversary Edition

Welcome to the 37th edition of the Carnival of Divided Government - The Special Four Year Blogiversary Edition.

Happy Birthday to me!

Four years ago, I started this blog by asking the question "Is this blog for you?", then offering the answer "Probably not." Well, I got that part right. 380 posts and 400,000 words later, uncountable throngs of blog readers reached the same conclusion and have flocked from this blog. In the meantime, the country has moved from disastrous Single Party Republican Rule to disastrous Single Party Democratic Rule. I think the country has a a collective learning disability. Nevertheless, we shoulder on - pushing that divided government rock up the mountain every election cycle.

A blogiversary is a time for reflection. Looking back on my first three posts from April, 2006 I take a certain perverse pride in offering a coherent and consistent thematic content from then until now. Then, we were advocating a straight Democratic vote in the 2006 mid-terms in order to break the hegemony and consequent bad governance of Single Party Republican Rule. Four years and two elections later, it's deja vu all over again. Now we are advocating a straight Republican vote in the 2010 mid-terms to break the hegemony and consequent bad governance of Single Party Democratic Rule. With a little luck, we'll have a similar result in 2010.

A blogiversary is also a time for presents. We like presents. It has been a while since we've spruced the place up. Since Blogger is finally getting around to updating their templates, we are giving ourselves a blog makeover for our birthday. Look for changes over the next few days or weeks. We've also giving ourself Twitter and Facebook accounts. We will be introducing them into our blogging process, just as soon a we figure out WTF to do with them. Everybody tells us we need then, so we must need them, but we really don't know why. For right now, we are content to see how many twitter followers we can accumulate without ever sending a single tweet.

In the meantime, the concept of and prospect for divided government is ramping up into the election season, so without further ado...
Read More ==>

It's the spending stupid.

BankruptingAmerica.org

Let me net this out:

Long term - I don't have an answer. But I do know that right now we don't particularly need a plan to build a hospital for our critically ill federal budget patient. What we need right now is a tourniquet to stop the bleeding.

Short term - Neither party can be trusted on spending. Divided government has been shown as a historical fact to restrain the growth of spending (as well as deliver other benefits) by scholars, political scientists, economists, historians, and constitutional lawyers. There is exactly one voting booth imperative for anyone concerned about spending - voting for divided government. This means voting straight Republican for federal office in 2010, and if they take Congress, then voting to re-elect Obama in 2012.

Republican vs. Democrat is a false choice.

Divided Government vs One Party Rule is the real choice facing voters.

Divided and Balanced.™
Now that is fair.

Poor Carpentry

Peter Beinart of The Daily Beast indulges in some Lakoffian framing to "explain" how the Tea Party movement isn't "populist." All he has to do to get there is redefine populism and by implication recast the federal government under the current administration as being the little guy. Seriously! Here, let's watch him stack the deck...

In American history, populism has a specific meaning: It’s our non-Marxist way of talking about class. Being a populist means standing up for the little guy against ruling elites.

Such vague claptrap is what Beinart deploys as a definition of populism for exclusionary purposes. And it fails on the face of it. In modern poli-sci terms populism is best defined as "an ideology which pits a virtuous and homogeneous people against a set of elites and dangerous ‘others’ who are together depicted as depriving (or attempting to deprive) the sovereign people of their rights, values, prosperity, identity and voice." [1]

This is a clear definition of populism that fits well the assorted populist movements in American history, including the current Tea Party movement. Beinart doesn't want to employ it because it specifically negates the rhetorical pretzel logic he has conspicuously constructed to steer the definition back into the fallacious trap of using "populism" as a mere sneering pejorative when describing any popular non-leftist movement. In Beinart's world, ONLY leftist movements employing identity politics can truly be "populist."

Beinart has substituted "little guy" into the equation to exclude anyone falling outside the heroic leftist totem of "the oppressed" from being capable of being "populist." In Beinart's world, only "the oppressed" can be "populists," and in leftist terms that automatically excludes anyone not favored by, well, leftists. It's simply a new polish on the old "victimhood" routine, one intended to deny victim status to anyone not of Beinart's tribe. One is either a victim or an oppressor, and by defining populism in terms of class struggle (while claiming he's being "non-Marxist" in doing so) Beinart seeks to automatically and categorically label the Tea Party people as elitist oppresssors. Thus anyone they are opposed to must categorically be the oppressed.

Now let's watch the second part of the framing attempt, in which Beinart casts the Obama administration in the role of the oppressed, since those opposed to the oppressed by Beinart's definition cannot be populists:

The Tea Partiers aren’t standing up for the little guy; they’re standing up to the little guy. We’ve long known that their leaders, like Sarah Palin, opposed against real regulation of Wall Street. Now we learn that what the Tea Partiers dislike about Barack Obama’s economic policies is that they don’t do enough for the rich. According to the Times, Tea Partiers are more likely than other Americans to think Barack Obama’s policies favor the poor, and they’re mad as heck about it.

Yeah, right. This is merely an attempt by Beinart to cast anyone opposed to the actions of the administration as being part of a privileged racist/elitist mob. Beinart is asserting here that being opposed to the massive growth of federal government and economy-crushing spending by same somehow automatically makes Tea Party people privileged elitists oppressing the "little guy." The "little guy" in this case being the federal government as personified by Barack Obama! (Try oppressing the IRS next time you're summoned for an audit. You'll quickly find out who the "little guy" really is.)

Pretty disingenuous stuff coming from a left-wing elitist Ivy League product of exclusive private schools, Yale, and Oxford. Perhaps Mr. Beinart has mistaken his own wealth of elitist privilege as being an acceptable substitute for intelligence, when even the most cursory examination of his premises makes clear that his ham-handed rhetorical framing is pretty poor carpentry indeed.

As George Orwell once famously remarked, "One has to belong to the intelligentsia to believe things like that; no ordinary man could be such a fool."

UPDATE: Right on cue, here comes reliable tool and left-wing elitist Ivy League product of exclusive private schools, Harvard, and Oxford E.J.Dionne promoting the narrative. Why, you'd almost think it was a coordinated effort on the part of left-wing elitist Ivy League products of exclusive private schools, Harvard/Yale, and Oxford to shape the narrative. Is having had a Rhodes scholarship one of the required credentials for this club? Elsewhere, Glenn Reynolds notes his own powers of prognostication.

UPDATE AGAIN: James Taranto at WSJ's Best of the Web takes notice with "Populism of the Privileged." Heh. Remember that we were there first.

[1] Albertazzi, Daniele and Duncan McDonnell, 2008, Twenty-First Century Populism: The Spectre of Western European Democracy, New York and London: Palgrave Macmillan, p.3

Econ 301: Data and Doubt

If like me you have a solid background in advanced real-world empirical economics, you're probably getting rather annoyed by now with the creatively optimistic interpretations of every stat release that comes out. This is generally a manifestation of confirmation bias, the tendency on the part of somewhat naive ideologues to see everything as evidence of their own wishes manifesting rather than as data points for objective assessment in a coherent empirical framework. Pointing out to same that they don't really know what they're talking about is somewhat futile -- ideologues follow pre-dispositions, not evidence and objective analysis, and the attempt will probably just get you called names. Especially as they tend to be certain they ARE being objective, despite the contrary evidence and their own lack of expertise in the field.

For those more interested in what's actually going on than in simply cheerleading their own fantasy scenarios, David Rosenberg of Gluskin-Sheff has a handy and concise list of some of the most mis-represented stats currently being used to cheerlead (and claim admin credit for) a "recovery" that at best looks to be somewhat slow and anemic at this point. A sample:

The ISM index came out before the payroll numbers did and injected a big round of enthusiasm into the pro-cyclical camp. The index did shoot up in March, to 59.6 from 56.5, and while many of the components were up, the prime reason for the increase was the eight-point surge in the inventory component, to 55.3. Moreover, the orders-to-inventories ratio slid to a level suggesting that we could be in for a big pullback in the next few months. Meanwhile, very little attention has been made to the construction spending data, which sagged 1.3% MoM in February with broad-based declines across sectors — and January’s 0.6% drop was revised to -1.4% (the fourth slippage in a row).

Go read the whole thing at the link. It's a good quick-and-dirty capsule check on why the institutional investors are not nearly as sanguine about the current condition of the national economy as the administration mouthpieces and partisan cheerleaders are.

UPDATE: Some related thoughts on the unemployment figures.

Why We Don't Trust Congress

Since mw is off having a good time again, I'm going to cross-post whatever comes to hand until he gets back and realizes what a horrible mistake he made in letting me have the blog keys ...



Georgia's 4th Congressional District must be so proud of him! I admire the admiral's forbearance. The really scary thing is that Johnson is a major improvement over the previous member to hold that seat. Even scarier, while he's not the sharpest knife in the drawer, the odds are excellent that he's not the dullest either.

Requiem for a Health Care Reform Dream

On Sunday night, over bipartisan opposition, the Democrats in the House of Representatives passed HR 3962 - the same flawed Heath Care Reform Act that passed the Senate on Christmas Eve. This should have surprised no one. There are 257 Democrats in the House of Representatives. With Nancy Pelosi cracking the whip, and President Obama taking representatives for joy rides in Air Force One, it was inevitable that 216 Democrats would eventually be found to vote for it. Now, whether it should have passed is another matter. I can think of at least one trillion reasons why this bill should never have become law. So let me start with an easier task - specifically what does not bother me about the passage of this bill - the parliamentary procedures and rules used by Democrats to pass it.

I am not particularly bothered about the reconciliation process being used to bypass filibuster challenges and pass the bill modifications with a simple majority in the Senate. Nor am I surprised by the heavy handed parliamentary moves used by the Democratic majority leadership to limit Republican participation. Although it was ultimately not used, I would not have even been overly exercised if "deemed as passed" was used to pass the bill, although I think it would have been a damaging political mistake for the Democratic majority.

Don't get me wrong, I consider these parliamentary machinations to range from unseemly to downright sleazy, but they are not outside of the normal legislative process. A casual review of the process by which the Republican leadership rammed through the Prescription Drug Benefit in 2003 undermines their credibility when expressing shock and dismay at the Democratic leadership making similar moves now. The only thing comparable to Republican hypocrisy on these questions is the Democratic hypocrisy using and defending them, as they were vociferous decrying these same techniques when they in the minority. The only people who have a legitimate complaint, are those voters who supported Obama and the Democrats based on the promise of bringing change, transparency, bipartisanship, and the end of special interest / corporate lobbyist influence to Washington D.C. All of that proved to be a lie. While there was a difference in the "talk" coming from candidate Obama, there is zero difference in the "walk" comparing President Obama and One Party Rule Democrats vs. President Bush and One Party Rule Republicans. Based on the deafening silence from Obama supporters on these broken promises, apparently no one actually believed Obama anyway.

Last August, Justin Gardner of Donklephant and I cooperated in crafting a joint post in support of S 391 -the "Wyden-Bennett" Healthy Americans Act.

"If we were starting with a blank slate, we would support vastly different and incompatible health care systems. But we are not starting there. We have different objections to the existing system, but agree that the current system is in need of reform. We also agree that the reform most Americans want includes three critical criteria:

1. Universal coverage for all Americans
2. Insurance against financial ruin if struck with an illness.
3. The reform program be fiscally responsible, manageable and have understandable costs."

That bill was long since buried in favor of the hairball passed by the Senate in December, passed by the House last Sunday and signed by the President on Tuesday. Democrat Ron Wyden voted for this version of HCR. Republican Bob Bennett voted against it. Justin supported this latest version of ObamaCare. I did not.

While Wyden-Bennett is dead and buried, it never had a proper funeral. In memory of this last best chance for a bi-partisan health-care reform bill that, unlike the bill that passed, actually reformed the health-care system, I though we should take one last look back. In particular a look back at the criteria by which we judged Wyden-Bennett, and apply that identical criteria to Obama's Health Care Reform Hairball (OHCRH) that is now the law of the land. This is what I said then:

“Wyden-Bennett has my support because it meets the critical criteria for reform, does it without increasing the deficit or requiring net new taxes. Wyden-Bennett has my support because it directly and honestly attacks the central problem of employer based health care insurance as the primary delivery vehicle for non-public health care in America. Wyden-Bennett has my support because it is not (yet) saddled with questionable deals for big pharma, big insurance, and payoffs for big union contributors... The trade-off for this mandated coverage is that we get a fiscally sound health care system that covers everyone, that puts no one at risk of financial ruin from getting sick, and does it without raising the deficit or requiring net new taxes. I am willing to take that trade-off. This is why I describe myself as libertarian-leaning as opposed to libertarian or Libertarian. Once in a while, I feel compelled to lean another way.”

To compare and contrast our quixotic dream of real reform with Wyden-Bennett vs the hairball that is now the law of the land, we'll grade OHCRH on a pass/fail basis against that same criteria:

UNIVERSAL COVERAGE - FAIL
On our first critical reform criteria - "universal coverage for all Americans" OHCRH falls short. Wyden-Bennett would have covered 99% of Americans upon implementation. In our joint post we found HR 3200 to be inferior, as it only covered 97% of Americans, and not until 2019. OHCRH is significantly worse, as it is not projected to cover more than 93% - 95% of Americans, and not until 2018. This law is worse than either Wyden-Bennett or the original House bill (HR 3200). So for the first critical criteria of real reform, OHCRH fails.

FINANCIAL SECURITY AGAINST CATASTROPHIC ILLNESS - PASS
This criteria distills into essentially three elements 1) Guaranteed insurance availability for people with pre-existing conditions, 2) Protection against losing insurance because of illness or arbitrary Insurance Company revocation or rescission and 3) Mandated coverage.When implementation of these benefits begin in 2014, this law fully addresses all of these elements. The "Individual Mandate" question is a factor in both coverage and managing costs, and merits additional discussion.

INDIVIDUAL MANDATE - PASS
As I stated in the analysis of Wyden-Bennett, there is no way to rationalize support for an individual mandate from a libertarian perspective. I simply decided that there is indeed a need for health care reform, that Americans want reform that offers universal coverage and financial protection against catastrophic illness, and there was no way to get there from here in a fiscally responsible way without invoking an individual mandate. So I abandoned my libertarian leaning principles on this issue and leaned another way, expressing grudging support for the mandate. Now, whether or not the individual mandate is constitutional is another matter altogether, and will be settled in the courts.

On these particular elements of reform, the OHCRH succeeds more than it fails, once the provisions kick in, if the administration and Democratic leadership even understands what they have crammed through the process. Which - one day after becoming law- it became apparent that they did not.

President Obama has repeatedly made the claim "Starting this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions." Yeah... no. That is not in the law. The way the law is written is that children get that protection in 2014, along with everyone else. So "Plan B" from the administration is to say the Department of Health and Human Services is empowered by the law to create that protection with regulations. I don't know which is worse - the fact that the administration itself does not understand what is written in the bill - or - their representation that wholesale major coverage constraints can be created or destroyed by regulatory fiat from unelected bureaucrats in the Department of Health and Human Services.

An additional post-passage surprise is Senator Ron Wyden's claim that the states need not sue over the individual mandate, since they can completely opt out of the act altogether. If true, I am not sure that anyone, including the administration, understands the ramifications of that provision.

FISCAL RESPONSIBILITY - FAIL
This criteria had three elements. 1) Reasonable and understandable costs, 2) Tax neutral and 3) Deficit neutral. All three criteria were met by Wyden-Bennett. At best OHCRH meets one of the three (Deficit neutrality) - and then only if you squint and don't look too closely.

DEFICIT AND COSTS - INCOMPLETE
The Congressional Budget Office determined that OHCRH will add about $1 trillion of new spending by the Federal government and will reduce the deficit by $138 billion in the next ten years and by $1.3 trillion dollars in the ten years after that. Taking the CBO analysis at face value would give OHCRH a passing grade with flying colors. The CBO is a non-partisan office and we have frequently cited their analysis on this blog, including their analysis of Wyden-Bennett. As such, it would be disingenuous to not accept their findings on the law as it was communicated by Congress. They are not always right, but they are unbiased, and represent the best estimate we are likely to get within the constraints that they generate their estimates. And there is the rub.

The CBO is required to generate their estimates based on the law as written, and not make assumptions about likely, but unsubmitted congressional actions. So if Congress is willing to game the CBO by - for example - excluding costs from a bill that will be added later in a separate bill the results will be wrong. It becomes a variation of the programming catch phrase "Garbage In Garbage Out". If Congress feeds a lie into the the CBO process, we get a lie back out. There are multiple lies and deliberate cost obfuscations that are in the law specifically to game the CBO estimate as documented here and here. Consider two of the more egregious whoppers.

• The first whopper is the "doc fix". This is an increase in medicare reimbursement rates for doctors that was promised to the AMA in order to secure their support. It was originally in the bill, now it is not, but is likely to be passed by Congress next year. It adds $200 B to the cost and immediately turns the deficit reduction into a deficit increase.
• The second whopper is the unfunded mandate imposed on the states. It increases the number of people that qualify for Medicaid, but the law does not pay for those additional entitlements, leaving it to the states. Since the the law, as written, does not cover those costs out of federal funds, the CBO analysis does not include them in their deficit calculation. This is one of the catalysts for 14 states (so far) suing to stop the law.

Representative Paul Ryan requested an additional CBO analysis using more realistic assumptions about likely future Congressional actions, and got a very different result. Since we have dueling CBO deficit estimates that will not be resolved until we see how Congress behaves on outstanding issues, I have graded the deficit status of this bill as INCOMPLETE.

TAXES- FAIL
On taxes, this law is an unmitigated disaster. New and increased taxes, fees, penalties, and fines are levied across the board. President Obama broke his promise to not raise taxes on the middle class with this law. I won't belabor this point. It is incontrovertible. You can find a comprehensive list of the new taxes here. The ramifications are already being felt by companies large and small.

Predicting the political and economic consequences of this law is not quite as popular as filling out March Madness brackets, but getting close. DWSUWF will make one easy prediction: One consequence of these additional tax burdens on our fragile economy is a continuing high unemployment rate for the foreseeable future (7.5%+ for at least as long as Obama is President and this law - as written - is in effect). We'll save the political prognostications for a future post.

This is a bad piece of legislation that will have negative consequences for our economy and country and should never have become law. On that one point many liberals, conservatives and libertarians agree. Perhaps President Obama has finally created the post partisan political environment he promised during the campaign. Many Republicans, Democrats, Liberals and Conservatives are now united - in opposition to the Obama Health Care Reform Hairball - also known as BFD.

Divided and Balanced.™
Now that is fair.

The Carnival of Divided Government Triginta Sedecim (XXXVI) Special Ides of March Edition

Welcome to the 36th edition of the Carnival of Divided Government- The Special Ides of March Edition.

Beware the Ides

CAESAR: Who is it in the press that calls on me? I hear a tongue, shriller than all the music, Cry 'Caesar!' Speak; Caesar is turn'd to hear.
SOOTHSAYER: Beware the ides of March.
CAESAR: What man is that?
BRUTUS: A soothsayer bids you beware the ides of March.
CAESAR: Set him before me; let me see his face.
CASSIUS: Fellow, come from the throng; look upon Caesar.
CAESAR: What say'st thou to me now? speak once again.
SOOTHSAYER: Beware the ides of March.
CAESAR: He is a dreamer; let us leave him.

On this particularly ominous Ide of March we look forward with fear and loathing to the imminent passage of the Great Healthcare Hairball of 2010. We only have Democratic One Party Rule to thank for this monstrosity getting passed, but ironically, divided government may be restored in the 2010 midterms as a consequence of this bill.

If we had divided government now, if the Republicans had a seat at table, if they were more than an impotent irritant in this government, then the Democrats would have been forced to compromise with the Republicans. The result would have been a better bill, a less expensive bill, a bill less burdened with special deals, unrelated liberal pet projects, gratuitous pork, and (unlike this abomination) one that might actually reform the health care system and coverage problems in a manner we can afford.

On a positive note - the concept of and prospects for divided government is getting a lot more attention on the intertubes.

Carnival of Divided Government

As explained in earlier editions, we have adopted Latin ordinal numeration to impart a patina of gravitas reflecting the historical importance of the series. In this the Carnival of Divided Government Triginta Sedicim (XXXVI), as in all of the CODGOV series, we select volunteers and draftees from the blogosphere and main stream media writing on the single topic of government divided between the major parties (leaving it to the reader to sort out volunteers from draftees). Consistent with this topic, the primary criteria for acceptance in the carnival is to explicitly use the words and/or concept of "divided government" in submitted posts. A criteria that, to our endless befuddlement, is ignored by many of the bloggers submitting posts, which sadly results in DWSUWF reluctantly ignoring their fine submissions.

First up - A short tribute to a DWSUWF friend and favorite blogger. While I was traveling last month, the blogosphere learned of the identity and untimely death of Al Weisel, more widely know by his blogging non-de-plume Jon Swift. You'll find many tributes to Al/Jon across the blogosphere. Like many bloggers, I exchanged e-mails and links with Jon over the last few years. His links to this blog helped us far more than our reciprocal links could ever hope to contribute to his. His was one of the very few talents in any medium whose writing could elicit a laugh out loud, can't catch my breath, side hurting, eyes watering reaction from this blogger. He'll be sorely missed.

Apropos to the Carnival, please consider this example of classic Jon Swift. Before the Carnival of Divided Government, - Before the DWSUWF blog - On January 29, 2006, Jon Swift considers the merits of divided government and clearly explains "Why Bipartisanship is Bad":

"But then I thought: Is bipartisanship really such a great thing? Aren't bipartisans a little like bisexuals--people afraid to make a commitment? I suppose it's better than President Clinton's "triangulation," which I believe is a translation of the French word menage a trois. Maybe such things work in France, but I don't think they work here. During the Clinton and Reagan administrations we had divided government, which I think was very confusing for people. Lobbyists had no idea who to give campaign contributions to and they sometimes had to split their limited resources between two parties."

When he wrote this, Republican One Party Rule controlled the federal government, and this blog was still a few months from being born. At the time, we were on the same team - arguing for Democratic victory, a return to the checks and balances of shared power and divided government in 2006. Jon's e-mails helped me learn about "carnivals" and launch the carnival you are reading now. So in his honor, we'll endeavor to follow the Jon Swift Blog Amnesty Day dictum of "Look up... Link down" and link primarily to small and medium bloggers. Blogs like DWSUWF.

Rest In Peace Jon Swift. Thanks for the help, thanks for the links, and thanks for the joy.

Brad Castro's Great Options Trading Strategies blog is focused on investments not politics, but he offers one of the most eloquent rationales for divided government I've read, exploring the relationship between "Divided Government, The Stock Market, and Long Term Investing":

"National politics is an ugly pastime at best, but when either party controls both branches of government at the same time, the outcome is certain – rampant arrogance, corruption, and hypocrisy... Americans are at their best when they choose divided government, when the politicians are forced to genuinely engage one another and actually work together to get anything accomplished. And, more importantly, when no single party can ram through their entire one-sided agenda... Checks and balances produce stability, and stability fosters an environment where growth, innovation, and the creation of value can flourish. It’s a gift that the founding fathers gave to a fledgling nation more than 200 years ago, and it’s one I sincerely hope we begin to enjoy again. "

The affection investors have for divided government has been a DWSUWF theme (and tag) since the beginning of the blog. With such incisive political acumen, I will have to take a closer look at Brad's investment strategies.

Fishermage is a little confused about the definition of divided government, but is in a celebratory mood at Fishermagical Thought exclaiming "Hooray for Divided Government":

"I'm no Republican, but the best this ole libertarian can ever hope for is divided government, and the Democrats' loss of their senatorial super-majority gives us that. Divided government helped make the Clinton years a success, as well as the Reagan Years. Checks and balances for the win."

Well, not exactly. To restore divided government the Republicans will have to claim the majority in at least one legislative branch in 2010, or retake the White House in 2012. While the loss of a super-majority in the Senate will add a speed bump to Democratic legislative plans, it won't force compromise, as we'll see when the Health Care Hairball becomes law later this week. While I appreciate the sentiment, there is still some work to do.

Matt Lewis notes that Andrew Sullivan, who claims to be a conservative, has changed his tune about Divided Government in "Andrew Sullivan Used to Like Gridlock":

"Sullivan had it right back in 2006. It seems, however, that he only liked divided government when Republicans controlled things. Now that Democrats control all three branches of government, he has changed his tune."

Uh Huh. During the election DWSUWF offered a somewhat wordier treatise on Mr. Sullivan's propensity to hoist himself on his own words and abandon this very basic cornerstone of limited government. I do wonder why he bothers to cling to the label conservative, if there are no longer any conservative principles he is willing to place above his loyalty to Barack Obama.

Jason Pye, writing on the United Liberty blog, answers the question posed on a now infamous billboard - "No, I don't miss George W. Bush":

"...while I’m no fan of Barack Obama, I don’t long for the presidency of George W. Bush. From a fiscal perspective, the Bush Administration was a disaster. Before you repeat the Dick Cheney talking point that most of the spending was for defense and two wars. Let me go ahead and tell you, that’s not true. Bush was the biggest spender since Lyndon B. Johnson, dramatically increasing non-defense discretionary spending. Remember, he is a “compassionate conservative,” which is apparently a nice term for “statist... So no, I don’t miss George W. Bush. I miss individual liberty, free markets, divided government and the Constitution."

Me too. Maybe we can start getting some of it back in November.

AD of Questions Presented quotes extensively from Ilya Solmin and Robert Kagan, then hupothesizes that libertarian support for divided government is misguided in "A Government Divided Against Itself Cannot Shrink":

"Perhaps the divided government theory overestimates the value of party affiliation as a determinant of individual behavior. Many political observers today note the similarities between the parties, especially when it comes to government size. Even granting the viability of the Blue Dog Democrats and the emerging fiscal conservatives in the Republican Party, in practice, politicians of all stripes seem to like power and act to enhance that power. If that’s the case, libertarians might find conventional political action in favor of candidates who support their views to be the best approach, however few of these candidates may exist."

AD offers an excellent read, but his musings fall far short on three counts-

First is the erroneous supposition in the subject title. There is no presumption by libertarians that divided government will "shrink government". The immediate problem is to slow leviathan's explosive growth, and there is a great deal of empirical evidence that divided government does exactly that. Moreover, political scientists, historians, and economists have also shown that a divided government state reinforces other positive effects including:

* Restrained growth of spending.
* Better oversight.
* Less corruption.
* Less likelihood of war.
* More carefully considered major legislation.
* Greater fiscal responsibility.
* Reinforced Checks and Balances between the branches.

Whether you consider divided government to be better government depends on whether you agree the items in this list represent "better" government. DWSUWF does. Invoking an analogy I have used before, when bleeding to death one should apply a tourniquet before looking for a hospital. The divided government voting heuristic is a tourniquet, that has been shown empirically to slow the bleeding when nothing else does.

His second problem is an over reliance on Professor Kagan 's representation of the supposed law-making deficiencies of divided government. In fact, David Mayhew's exhaustive research on the quantity and quality of laws produced under divided vs. one party government is well documented in his book "Divided We Govern" which is considered the definitive work on exactly this question. Mayhew's empirical conclusion directly contradicts Kagan's less rigorous intuitive and anecdote based analysis.

Third, there is nothing in the divided government voting heuristic that precludes libertarians from voting for candidates "who support their views". Voting for divided government is a tactic that yields immediate beneficial shorter term limited goals. In addition, it at least opens the door to the possibility that the generally self-canceling impotent libertarian minority voting constituency can be organized around a principle that could yield sufficient political clout to actually impact policy.

Other than that, it's a great post.

Speaking of out of control government spending - Redst8r shows exactly why a tourniquet would be quite beneficial right now in "Government Spending (post #3 of 3)":

"Note the sharp rise in combined spending beginning in the early 1930’s. This level of spending never declined to the pre-1930’s level again but became a base upon which all future spending growth has been multiplied. Post WWII spending never again was as low as that in the mid 1930’s and early 1940’s. There are clear periods of level spending (e.g., spending rising in concert with GDP) such as the post Korean war period through the late 1960’s, the 1980’s and a gentle decline in the 1990’s as a peace time economy combined with a technological revolution and a divided government controlled its innate spending impulse. "

Sometimes, if you don't apply a tourniquet nothing else matters.

Akiva of Mystical Paths guest posted at Dovbear and airs her lament "Oy, I miss Clinton":

" I'm a conservative but I don't want my party to control the Whitehouse and Congress. And my dear friendly Liberals, be honest, neither do you! Divided government forces everyone to compromise and be reasonable. Let's face it, we all want the middle of the road. A little right, a little left - hey whatever. But far right or far left, G-d help us all."

Amen.

Macaoidh at The Hayride quotes Larry Kudlow and Will Collier and concludes that they "Kudlow, Collier Socre with Defenses of Gridlock":

"It’s a narrative the Washington/New York legacy media can’t seem to understand, but America was designed to have a slow-moving, incrementalist government incapable of dynamic action to solve social problems. Dynamic action was meant for the private sector or, at most, local and state governments. This has been lost over the past 100 years, with those periods of divided government serving as interregna between the advances of the federal nanny-state. But as Kudlow and Collier suggest, better an interregnum than an Obama running roughshod over the economy and individual liberty in an effort to create a public-sector paradise."

Good stuff, but... Kudlow might run for the Senate against Chuck Schumer in New York? Really? Wow. I missed a lot while I was out of town.

Finally, I debated whether to include this next submission. It is - strictly speaking - not on topic. Moreover, I could not disagree with the premise more. But - in memory of the generous spirit of Jon Swift, who frequently linked to those who he disagreed with (even if they did not always understand that they were being skewered in the link) I offer this submission without further comment.

Randy Pope presents "America's State Established Religion, Secular Humanism, Cannot Achieve Unity out of Diversity" posted at Christian Worldview of History and Culture, saying:

"This nation was not founded upon the philosophy of Secular Humanism. It was founded upon the principles of Biblical Christianity. As long as the American culture was grounded in true Christianity there was a unity among the diverse peoples of this nation. The farther the culture diverts from a Christian worldview the more polarized the people become. So the answer to the question, “What has changed? And can unity be regained in such a vast nation of different peoples?” is that America has rejected the only philosophy that makes sense out of a unity in diversity, and a return to ordering society by a Christian worldview will accomplish the unity that Americans desire."

OK. I lied. I will make a comment. Randy Pope needs to do a little more reading about American History and our founding fathers. In particular I suggest he learn more about the philosophy of the author of the Declaration of Independence and our third president - Thomas Jefferson. He could start with this post, and the following quote from a letter written by Thomas Jefferson to Dr. Jacob De La Motta on the occasion of the dedication of a new synagogue in Savannah, Georgia:

"It excites in him [Thomas Jefferson] the gratifying reflection that his country has been the first to prove to the world two truths, the most salutary to human society, that man can govern himself, and that religious freedom is the most effectual anodyne against religious dissension: the maxim of civil government being reversed in that of religion, where its true form is "divided we stand, united we fall." - Thomas Jefferson

Sorry Randy - you are wrong about our history, wrong about the founders, wrong about what America is about, and just flat wrong.

Miscellany

Traditionally, we conclude this Carnival by including one "off-topic" submission, as a grudging acknowledgment and proxy for the many off-topic submissions received. Off-topic in this context meaning - no mentions of "divided government" or gridlock.

For this edition we offer Madeleine Begun Kane who practically has claimed a permanent status on this spot with her entertaining and profligate political poetry production. However, I am violating my usual rules for this spot, as she offers a submission where - as she states: "I even use the word gridlock. :)"

So without further ado - Senator Bayh, Buh Bye! posted at Mad Kane's Political Madness:

Sen. Bayh will not run again. Why?
Cuz there’s “not enough progress.” How wry!
He says partisanship
Is the cause. Here’s a tip:
Our problem is DINOS like Bayh.

On the other hand... thanks Senator Bayh. You've helped move the prospects for "10 in 10", a Republican majority in the Senate, and divided government incrementally closer.

With that, we''ll wrap up this edition. It is 11:55 PM and I am going to barely get this under the wire on the Ides of March. Thanks for stopping by, and thanks for all of the submissions (on-topic or not).

It looks like we need to pick up the Carnival pace in this election year as divided government content is on the increase. Look for the next edition of The Carnival of Divided Government Triginta Septendecim (XXXVII)- Special Four Year Blogiversary Edition on or about 4-23-2010. Submit your blog article at carnival of divided government using our carnival submission form.

Divided and Balanced.™
Now that is fair.

Friday Flotsam - Back on the Blogging Beach Edition.

Wherein we take a stroll down the metaphorical beach of the DWSUWF blog and note the detritus that has washed ashore and cluttered our little island of rationality in the great big blogospheric ocean. The beach is particularly messy as we have neglected it over the last few weeks. Your loyal blogger was distracted, spending time touring foreign lands and blogging about the adventures to be found on the other side of the globe.

But it is an election year, the "stupid season" is upon us, and it is time to get back to work. Permit me to share a few of the shiny items we found washed up on the beach. Unsurprisingly, the first few objects we picked up look remarkably similar to items we have seen here before.

First, a shout out and a quick "thank you" to Tully, who wandered over and lit a couple of signal fires to to keep the DWSUWF island from appearing deserted over the last month. We hope he will continue to visit and help me clean up this mess.


ITEM - Anthropogenic Global Warming is still not settled science even if Daily Kos and the Zimbabwe Academy of Science think it is.

Noel at Newsbusters and McQ at Q&O complain that USA Today gave climatologist Michael Mann a free pass and an uncritical front page soapbox to make his case yesterday. Despite the kid-glove treatment, when a USA Today headline and front page article asks the question "Is the Global Warming movement cooling?", I'd say the AGW alarmists have a serious problem:

"Indeed, the controversy has contributed to a fundamental shift in efforts to stop global warming, forcing environmentalists to scale down long-held ambitions and try to win back an increasingly skeptical American public. Walter Russell Mead of the Council on Foreign Relations, a New York-based think tank, says recent events may be causing "the death of the global warming movement as we know it."

Of course, Michael Mann, whose sloppy science contributed to growing public skepticism of global warming, has a different view:

"Mann says the core argument — that the Earth is warming, humans are at least partly responsible, and disaster may await unless action is taken — remains intact."I look at it like this: Let's say that you're in your car, you open up the owner's manual, and you discover a typo on page 225. Does that mean you stop driving the car? Of course not. Those are the kind of errors we're talking about here," Mann says. "Nothing has fundamentally changed."

With all due respect to Michael Mann, cherry-picked data sets selected to conform to a pre-determined hypothesis, data massaged with "correcting " factors, ignoring the statistical level of error introduced by the correcting factors, and failing to make source data available - amounts to more than a "typo". But Mann is right about one thing: "nothing has fundamentally changed". The Mann/IPCC/East Anglica University CRU hypothesis that the world is experiencing an unprecedented period of global warming wildly at variance with recent geological history was never proven, and remains unproven today. So - indeed - nothing has fundamentally changed.

None of this has prevented acolytes of AGW quasi-religious "settled science" dogma from climbing into the pulpit and instructing the flock to open the hymnbook for a sing-along. The favored hymns invariably use sloppy semantics, ad hominem labeling ("global warming deniers"), combined with appeals to questionable authority in order to dismiss AGW skeptics. A recent example at Daily Kos takes a kitchen sink approach - the point of the post apparently being that once the Zimbabwe Academy of Science and the American Academy of Pediatrics profess support for AGW - no one should question it. Sloppy semantics are found in the "poll" accompanying the post, where the flock are asked to opine on whether the climate is indeed changing and how to prioritize fixing the problem (Sample response option - "The climate is changing, but it's not a problem").

Here is the reality: The climate is indeed changing. That is a fact. We know it is a fact because the earth's climate is, has been, and always will be changing. It has been changing every second of every minute of the entire history of the planet. It always has and it always will - whether or not people were, are, or will be burning fossil fuels.

It is also reasonably clear from the data that we are in a period of global warming. What has not been shown to any level of scientific certainty or consensus is :

1. Whether this period of warming is outside of the range of normal climate change fluctuations that the planet has experienced in recent geological history, or
2. Whether our fossil fuel impact is a major factor in that change.

In 2001, Michael Mann, the CRU, and the IPCC asserted an extraordinary scientific claim that we are experiencing the greatest global warming in a millennium, predicted dire consequences, but failed to deliver the extraordinary evidence required to support that extraordinary claim. Instead, they offered sloppy science, a corruption of the scientific methodology, a failure to deliver reproducible evidence, a report rife with errors and filled with statistical contortions. Many of these were invoked specifically to overturn the previously accepted science showing a Medieval Warming Period that was warmer than we are experiencing today (and not needing human carbon contributions from burning fossil fuel to get there).

Net net... the AGW adherents believe that the globe is warmer than it has been in a millennium. The good thing about science, is that belief does not matter. It takes time, but eventually science will out.

ITEM - Barack Obama is not George W. Bush, but he might as well be.
Last Sunday, the ACLU ran a full page ad in the New York Times with a graphic showing the president morphing into his predecessor. The ACLU ad and open letter received a lot of attention across the blogosphere. It reminded me of something I read about a year ago... who was that? Oh wait... I remember - that was me, when I noted "Obama Endorses the Bush/Cheney Unitary Executive. Again and again and again":

"It was the most seductive argument to vote for Barack Obama - We need to elect a Democrat to "undo the damage" of the Bush administration...I expected to enjoy a couple of consolation prizes with the Obama victory. First, balance would be maintained in judicial appointments and on the Supreme Court,and second - Obama would indeed roll back some of the worst [Unitary Executive] offenses of the Bush administration. While I still have high hopes for the first consolation prize, early indications are not promising for the second. Not promising at all..."

In many ways, the Obama administration incarnation of the Bush/Cheney Unitary Executive is far worse than the Bush version. Then there was robust opposition from the left. Now, the handful of voices on the left raised in defense of civil liberties and in opposition to the continuing accretion of power to the executive branch, are lost in the noise level of the Obama apologists. They are the equivalent of "Loyal Bushies", and appear to crave nothing so much as a benevolent Obama monarchy. There were two possible paths that might have been pursued by Obama in relation to the previous administration. The Bush/Cheney executive power grab could have been seen as an outlier, an aberration inconsistent with our Constitution and reversed by Obama, restoring balance to the checks and balances between the branches. Instead the Bush/Cheney view of the unitary executive was embraced by Obama and institutionalized with the passive compliance of a lap-dog Democratic Congress. The result is that the Bush/Cheney unitary executive is now the norm, the new benchmark and will remain so for the indefinite future. At least until that new executive power is abused by this or a future executive, and Americans finally understand what they have given away.

That said, this blogger continues to be surprised by the depth, breadth and frequency with which Obama=Bush meme is being flogged across the left-o-sphere. Examples include to leadership style, national security, Afghanistan, civil rights, detention without trial, Health Care, even Digital Rights Management and salmon environmental policy on the west coast. I guess it is ok for him to act like Bush, just so long as he is not Bush.

ITEM - Harry Reid will change the rules of the Senate for the majority party. Good news for Harry and the Democrats, unless the Senate majority in 2011 is Republican.
Senate majority leader Harry Reid has climbed aboard the anti-filibuster bandwagon, promising rule changes in the 2011 Senate to weaken the use of the filibuster for the minority party.

"...the process seems to be proceeding from the premise that Senate Democrats are fed up with the filibuster. "In baseball," Reid said in a clipped tone, "they used to have the spitball. It originally was used with discretion. But then the ball got wetter and wetter and wetter. So soon, they outlawed the spitball." The same, he said, had happened to the four-corner offense in basketball. "And just the way the spitball was abused in baseball and the four-corner offense was abused in basketball," Reid said, "Republicans have abused the filibuster."

Harry Reid is presuming that:

1. He will be re-elected to the Senate, and
2. Democrats will still be in the majority for the next Senate.

Admittedly, the Democrats have such a large majority in the Senate that the odds remain strong they will maintain their majority. Still, there appears to be a level of hubris about the expected outcome of the midterm elections evident in the comments of Senators Reid and Schumer, that reminds this blogger of nothing so much as the Democratic Party complacency about the outcome of the special election in Massachusetts. So let's checkpoint on how the GOP Ten in Ten scenario is playing out.

With Evan Bayh dropping out in Indiana the odds, while still long, got appreciably better for the Republicans to swing the nine additional seats they need. Nate Silver is projecting that the top seven senate races most likely to change parties are all Republican pickups (ND, DE, AR, IN, NV, CO, PA) . Getting two more will be difficult for the GOP as they'll need two of these five - IL, CA, WI, WA, NY - and still hold serve on all GOP seats. Unlikely, improbable, but certainly possible. It is at least as possible as a Republican winning Ted Kennedy's MA seat.

Pat Caddell's analysis indicates that Democratic Party hubris on the health care bill may be just the catalyst Republicans need to change the game in November. It certainly opens the door to the possibility that if the majority changes the rules for the Senate in 2011, it may be the GOP that do the changing:

"Nothing has been more disconcerting than to watch Democratic politicians and their media supporters deceive themselves into believing that the public favors the Democrats' current health-care plan. Yes, most Americans believe, as we do, that real health-care reform is needed. And yes, certain proposals in the plan are supported by the public. However, a solid majority of Americans opposes the massive health-reform plan. Four-fifths of those who oppose the plan strongly oppose it, according to Rasmussen polling this week, while only half of those who support the plan do so strongly. Many more Americans believe the legislation will worsen their health care, cost them more personally and add significantly to the national deficit. Never in our experience as pollsters can we recall such self-deluding misconstruction of survey data... the notion that once enactment is forced, the public will suddenly embrace health-care reform could not be further from the truth -- and is likely to become a rallying cry for disaffected Republicans, independents and, yes, Democrats."

By passing the wildly unpopular ObamaCare bill, Pelosi and Reid may have "just enough rope" to get the job done - to the benefit of Republicans in November.

Divided and Balanced.™
Now that is fair.