Crime and Punishment

The New York Times notes that New York City police stopped and frisked minorities nine times more often than whites in 2009 despite having similar arrest rates after being stopped and frisked.

The article implies the police are doing something wrong by stopping minorities so often, but the opposite appears true: if their stop and frisk approach leads to similar arrest rates, then the police are able to gauge a similar degree of criminality across the population.

This also sheds some interesting information on the current controversy with Arizona's law on allowing the police to stop people to see if they are illegal immigrants. The U.S. Supreme Court, in Terry v. Ohio, allowed police to detain someone briefly under a "reasonable suspicion" standard, rather than the more stringent "probable cause" standard. New York City is currently stopping over 570,000 people per year and arresting about 6% of them.

That is a large number of people being stopped, with a fairly small percentage being arrested. If such a tactic is appropriate to deal with New York's crime problem, I wonder if the courts will overturn Arizona's attempt to deal with its illegal immigration challenge?

Where's the Outrage II?

Coming Oon the heels of Freddie Mac asking for another $10.6 billion from the federal government to cover its first quarter losses, Fannie Mae has requested another $8.4 billion.

Since the Obama administration is using Fannie and Freddie to prop up the housing market while keeping their liabilities off the balance sheet of the U.S. government, Obama will continue to fund their losses without looking to reduce taxpayer losses.

The financial "reform" legislation that Obama and the Democrats want to pass has no reforms of Fannie and Freddie, despite their seminal role in the financial crisis and their staggering losses.

Where's the Outrage?

Freddie Mac, one of the two government-sponsored mortgage companies that played a central role in creating the financial crisis by spurring lending in lower credit quality mortgages, announced another $6.7 billion loss and asked the government for another $10.6 billion.

If this were Citigroup, Goldman Sachs, or any other private company, it would be a major news story and lead to cries of outrage directed against Wall Street, the company, and management.

So why is the story on the back pages of the Wall Street Journal and the New York Times?

Here's a hint. Precisely because it was created by the government to spur mortgage lending; precisely because Democrats blocked regulatory reform of Freddie Mac and its related company Fannie Mae; and precisely because blaming Wall Street helps avert attention from the government's role in the financial crisis, the press doesn't want to make a big deal about the catastrophic losses Freddie and Fannie have experienced.

Freddie and Fannie have cost taxpayers $136 billion, with more losses projected. Meanwhile, TARP funds invested in Wall Street banks will likely turn a profit.

Inconvenient Facts

Barack Obama has said he wants America's exports to double over the next five years.

That's certainly a laudable goal, but it is instructive to review the categories of products which were America's top exports in February 2010.

Pharmaceuticals were America's number 1 export that month, and medical products were the seventh highest.

It is ironic that ObamaCare, which will lead to restrictions on the development and growth of the pharmaceutical and medical device industries over time, will hurt important parts of our export industries.

On the other hand, the auto industry, which received unprecedented government assistance that will never be fully repaid, is no where to be seen.

So Obama attacks some of our most successful industries and assists some of our least successful ones. While that is a terrible investment strategy, it is consistent with government intervention in the economy, which seeks to aid troubled industries and hurts successful ones.

The proper government policy is one which plays no favorites, maintaining a level playing where success and failure are earned in the marketplace.

Financial Tabloid

The Wall Street Journal is an excellent newspaper on many levels, but it does have a character flaw: its coverage of Wall Street includes tabloid-like stories such as the one it ran recently on Goldman Sachs.

In the story, the Journal discusses a hamburger-eating contest among Goldman's mortgage traders after bonuses were paid in December 2007. It is ostensibly part of the story's theme, which is Goldman's "take-no-prisoners attitude".

Or the guys were just having some silly fun.

Moreover, the story only lets the reader know on the back pages in the second half of the article that any money wagered was donated to charity.

The public may have a prurient interest in the behavior of some on Wall Street. It doesn't mean it is the proper journalistic target of one of the nation's leading newspapers.

The Left Knows

Smart leftists know that their policies will cause various economic damage, even though they seek to hide that fact in public debate.

Andy Stein, who resigned this week as head of Service Employees International Union, was Barack Obama's biggest supporter in the 2008 presidential election. Stein has the SEIU contribute $85 million to help Obama and the Democrats win in 2008.

As quoted in the Wall Street Journal, Stein once said: "Western Europe, as much as we used to make fun of it, has made different trade-offs which may have ended with a little more unemployment but a lot more equality."

Funny how Barack Obama didn't make that idea part of his 2008 campaign.

SEC Malfeasance

You have no doubt hear all about the big news coming out of the Securities and Exchange Commission last Friday.

If you think I'm referring to its lawsuit against Goldman Sachs, that's because the SEC got away with its Goldman bomb to deflect attention from its malfeasance in the Standford Group's $8 billion Ponzi scheme.

The SEC's own inspector general investigated the SEC's actions (or more accurately inactions) regarding Stanford. And the report, buried on the SEC's website, paints a devastating picture of the regulatory agency defaulting on its core mission - to protect investors from fraud.

The SEC's investigators believed Stanford was a Ponzi scheme in 1997 and referred the case to its enforcement division to prosecute. If the SEC had done this, most of the $8 billion of money lost would have never occurred - since Standford's Ponzi scheme grew in size and scope over the next 11 years.

When the inspector general asked why the case against Stanford wasn't brought, he was told the SEC preferred to bring cases against prominent firms that we easy to win.

Naturally the Democrats response to the financial crisis is to give more money and authority to such a bankrupt organization.

And when the SEC does bring case, such as the one against Goldman Sachs, don't assume it does so for honorable reasons.