Where's the Outrage?

The Congressional Budget Office believes that none of the $50 billion in TARP funds used to modify home mortgages will be repaid to the U.S. Treasury.

$80 billion of TARP funds was invested in the auto companies, and GMAC just announced it needs several billion dollars more. It would be shocking if the government gets its money back, yet alone turns a profit. Staggering losses are more likely.

Meanwhile, many of the banks that received TARP funds have returned the money or have produced a profit for the Treasury.

So in a rationale world, you would expect intense scrutiny of why the government's spending on the mortgage modification and auto company investments has been squandered.

Instead, we are treated to attacks on the banks who have returned the money or where the government made a profit.

Why? Because the Obama administration and the Democrats are doing all they can to deflect attention from the government's role in causing the financial crisis, through encouraging subprime lending and the low interest rate policy of the Federal Reserve, by focusing on the employee compensation at the banks. And in the process, Obama can hand subsidies to his union supporters and people looking to restructure their mortgage obligations.

This is America?

Pay czar Kenneth Feinberg cut salaries before he raised them. If that sounds like one of John Kerry's flip-flops from the 2004 presidential election campaign, it is probably because Feinberg has a job that simply shouldn't exist in America.

Feinberg is responsible for reviewing employee compensation at the largest recipients of government bailout funds.

He announced last week significant reductions in employee compensation for the top 25 employees at seven large TARP and auto bailout recipients, saying: "One of the critical aspects of what I tried to do was to vastly diminish the amount of guaranteed cash salary that would be paid these top officials."

"Guaranteed cash salary" is another phrase for your weekly paycheck. But now we learn that Feinberg increased salaries, while reducing discretionary cash bonuses.

Bonuses are paid based on the employee's individual performance, as well as the success of the company and the groups within the company for whom they work.

Feinberg aslo increased significantly the amount of stock employees are paid and the amount of time they have to hold the stock before it can be sold. While this seemingly ties compensation to the company's performance, the reality is that for most of the effected employees, outside the CEO and perhaps a handful of senior executives, their individual performance has only a modest effect on the company's stock price at these large companies.

So Feinberg, in bowing down to the anti-compensation crowd, has moved away from a pay-for-performance compensation culture through his intervention in the market for employee compensation.

And as bad as this is for the health of the companies in question and the overall economy (note that Feinberg and the Obama administration want this to serve as an example other companies to emulate), it represents another in the long line of outrageous interventions by the government in matters that ought to lie outside the proper scope of government.

Anti-Trust Insanity

Independent booksellers have asked the Justice Department to investigate Wal-Mart and Amazon for possible anti-trust violatons as a result of their price war in best-selling books.

Recently, Wal-Mart's website has slashed the price of best-sellers in an attempt to attract customers to its internet operations, and Amazon has matched the price reductions to stay competitive.

This is good news for customers, as businesses battle to win customer loyalty by aggressively cutting prices.

So how could other book retailers have an anti-trust case?

That's because anti-trust law produces crazy and outrageous results. Literally, every action by a business could potentially be deemed a violation of anti-trust law. Here are various violations of anti-trust law:

• Predatory pricing means a competitor lowers prices in an attempt to increase market share.

• Collusion in pricing means competitors charge the same price as one another.

• Monopolistic pricing means a competitor charges highers prices as a result of its leading market share.

So a price that is lower than competitors, the same as competitors, or higher than competitors can all be violations of anti-trust law - and since that covers the entire range of prices possible, literally all business behavior is at risk of violating anti-trust law.

Further, the Wal-Mart/Amazon matter illustrates that anti-trust law is often used by one business to seek an advantage over another by running to the government to seek protection from competition in the marketplace.

All of this makes anti-trust law one of the most unjust laws in the land.

Let's Bleed 'Em Dry

Ford is running into problems with the auto workers approving concessions which the company and the UAW leadership agreed. These concessions would keep Ford competitive with GM and Chrysler, who previously won the same concessions from the UAW and its members.

Because Ford is doing better than GM and Chrysler, auto workers are thinking that they don't need to make the same concessions - since if Ford is in better financial shape, it has more room to be bled with above-market compensation.

This continues the destructive behavior that the UAW and other large unions have shown for decades, destroying companies and industries (think auto, steel, and airlines with their multiple bankruptcies) in the process.

And thanks to Obama's bailout of GM and Chrysler, Ford pays the price for its success.

Change We Need

Barack Obama is waging a campaign to destroy Fox News. Obama doesn't like an organization that doesn't fawn all over him and his administration, and is trying to get other media outlets to treat Fox as not a news organization.

The thuggishness of Obama and his gang is really astounding. He has told his opponents to stop talking, his administration sought adverse emails opposing his health care plans, and now he is striking at Fox.

It is important that we not find this "ironic", since Democrats / leftists ostensibly support free expression. That train left the station long ago, as best evidenced by college campuses that are rife with speech codes and other restrictions on open debate that, in practice, generally act to limit conservative views.

Obama and his gang are largely living what they experienced in their academic careers (recall Obama taught in law school). The First Amendment is critical to protect your own speech, but not so relevant when it is dissenting voices that speak.

It is a shocking thing to say, but Obama is tougher on Fox News than Iran.

What's the Big Deal with the Berlin Wall?

Barack Obama is apparently too busy to attend the 20th anniversary of the fall of the Berlin Wall that marked the collapse of the Soviet Union's empire in Eastern Europe, the reunion of East and West Germany, and two years later the collapse of the Soviet Union. It was the defining moment that ended 45 years of Cold War, and with it the specter of a nuclear holocaust, with freedom, and America, securing one of the greatest victories in history.

Germany naturally regards the fall of the Berlin Wall as a great event in it history, and the 20th anniversary celebrations will include various notables, including Mikhail Gorbachev.

But incredibly, it won't include Barack Obama.

The administration claims he is too busy - but he isn't too busy to fly to Europe to lobby for Chicago's Olympics bid nor is he likely to be too busy to go to Oslo to claim his Nobel prize.

So for this great event in American, and world, history, being too busy can't possibly be the real reason for Obama avoiding the celebration.

I think the real reason is that Obama is doing another favor to Russia, for whom the fall of the Berlin Wall led to the Soviet Union's shattering defeat and dissolution. Obama is keen, even desperate, to bend over backwards to appease Russia in the hope it will help pressure Iran.

So far, Russia has repeatedly said it doesn't support sanctions against Iran. So even if you believed double-crossing Poland and the Czech Republic over missile defense, making it harder for Georgia to join NATO, and now avoiding the Berlin Wall celebration were good ideas in order to secure Russia's support on Iran, we aren't even getting the pay back for our efforts.

And we are betraying fundamental American values and interests in the process.

The Miracle of Capitalism

This article in the Wall Street Journal shows the extraordinary power of what freedom can do to improve the human condition.

India has been enjoying the benefits of capitalist-oriented economic reforms for over 15 years, improving the well-being of millions of people. Much of India's economic growth has been driven by serving export markets.

But there is a growing trend for Indian companies to develop new products for low income Indians, producing low-cost products that before had been too expensive for hundreds of millions of Indians. From cars that cost $2,200 to refrigerators that cost $70, many Indians can now begin to enjoy conveniences that the West has taken for granted.

Capitalism is the most revolutionary force in human history, producing incalculable benefits to the human condition. It is wonderful to see it finally coming to India after so many decades of socialism.

Denmark to US: Get Your Act Together II

The civilian head of NATO, Anders Fogh Rasmussen, endorsed General Stanley McChrystal's strategy to add more troops to the Afghan war effort.

Meanwhile, Barack Obama continues to deliberate over whether to try to win the "war of necessity" (Obama's words) in Afghanistan.

The Pay Czar

Citigroup solved a political problem by selling its Phibro commodities-trading business for book value. The problem? Andrew Hall, the star trader at Phibro, is likely to make nearly $100 million this year pursuant to his employment contract with Citigroup that pays him a percentage of Phibro's revenues.

Kenneth Feinberg is the "pay czar", appointed by Barack Obama to evaluate employee compensation at companies the U.S. government has invested in through TARP and the auto bailout. He was planning to produce an embarrassing report to Citigroup on Hall's pay, so the firm decided to avoid a political backlash by selling Phibro.

However, Citigroup gets no value for the business beyond compensation for the net assets of the business, which is the equivalent of liquidating its assets - despite Phibro earning hundreds of millions of dollars a year for Citigroup.

So the U.S. government, through its pay czar, has pressured Citigroup to sell a business for such a low price that Citigroup's value has declined as a result - and the U.S. government is Citigroup's largest shareholder. In effect, the government took money out of its own (and taxpayers) pockets to satisfy political correctness.

And Andrew Hall will continue to earn vast sums, at his new employer.

I hope you "feel" better as a result, because that's all the good that will come from this bizarre outcome.

Democrats Run Amok

Democrats are anxious to raise taxes to feed their spending dreams, so the latest tax plan is a real doozey: a tax on financial transactions that could raise $100-150 billion per year. The idea is each time a stock trades, a tax is levied on the trade.

Two things will happen with such an obscene tax. Financial transactions will move offshore, destroying high-paying financial services jobs in America. And the value of U.S. companies will decrease, as investors factor into their valuations the tax liability from selling shares.

Lower stock prices reduce American's net worth for retirement and college savings and all the other reasons people save and invest, and raise the cost of capital for businesses seeking to grow - which retards economic growth.

Pigs at the Trough

Barack Obama has proposed giving $250 to over 50 million recipients of government spending, such as people who receive Social Security or federal pensions.

Total cost: $13 billion.

One motivating factor is that Social Security recipients will have no cost of living adjustments, and the horror of that is causing politicians to consider this giveaway. But since the lack of a cost of living adjustment corresponds to a lack of inflation, which it is based on, there is no need for the handout.

But with fiscal discipline obliterated with a $1.4 trillion, what's another $13 billion when votes can be bought?

Three Cheers for Thomas Friedman

You will rarely hear me say good things about the columnists in the New York Times, but Thomas Friedman's column on what Barack Obama should do with winning the Nobel Peace Prize is truly outstanding.

The premise of the column is that Obama should state, when giving his acceptance speech, that he cannot accept the prize on behalf of himself. Instead, he accept it on behalf of the greatest peacekeepers in the world for the past 100 years - the U.S. military. Friedman writes what he thinks Obama's acceptance speech should say, with this key quote:

"Let me begin by thanking the Nobel committee for awarding me this prize, the highest award to which any statesman can aspire. As I said on the day it was announced, 'I do not feel that I deserve to be in the company of so many the transformative figures who've been honored by this prize.' Therefore, upon reflection, I cannot accept this award on my behalf at all.

But I will accept it on behalf of the most important peacekeepers in the world for the last century - the men and women of the U.S. Army, Navy, Air Force and Marine Corp."

I couldn't have said it better myself.

UK to US: Get Your Act Together

British Prime Minister Gordon Brown announced plans to deploy 500 more troops to Afghanistan and indicated support for General Stanley McChrystal's counterinsurgency strategy.

The timing of Brown's announcement is quite remarkable, since Barack Obama is engaging in a well-publicized, drawn-out debate within his administration on whether to carry out General McChrystal's counterinsurgency strategy or pursue Joe Biden's counterterrorism strategy.

Gordon Brown is clearly trying to influence Obama's decision, and is a further sign that our allies are growing nervous at Obama's leadership. Obama called Afghanistan a "war of necessity" and critical to America's security throughout the presidential campaign and in the first seven months of his presidency, yet got cold feet when the effort looked harder than he hoped.

Even if Obama stays the course, Afghans and Pakistanis will now be more reluctant to side with America in the struggle against the terrorists and Taliban, due to Obama's waffling. Why side with someone who may abandon you, against someone who lives in your community?

While Obama's rhetoric may warm the hearts of leftists around the world, he is scaring key allies by waffling on the war on terror and in promoting nuclear disarmament as Iran works feverishly to develop nuclear weapons.

Leviathan Wins Again

Bank of America has succumbed to the pressure of New York Attorney General Andrew Cuomo, who had demanded that BofA hand over documents subject to attorney-client privilege.

A bulwark of our (supposedly) free society is that people and companies can receive confidential legal advice, so that you can receive the full benefit of legal counsel without constraints on what is said by the prospect of future discovery by the authorities.

But companies are subject to great political pressure, with many facets of their business at risk if they oppose the demands of government. While it would have been a defiant blow for freedom if BofA could have stuck to its guns and resisted breaking attorney-client privilege, the real outrage is directed at Andrew Cuomo and the other prosecutors around the country who believe winning is more important than justice.

"History Calls"

Olympia Snowe, the sole Republican on the Senate Finance Committee to vote for the health care bill, said of the bill she just voted for: "Is this bill all that I would want? Is it all that it can be? No. But when history calls, history calls."

It is a telling comment and speaks to the type of political leader who wants to "make history" rather than good policy.

In its more extreme manifestation, such sentiments lay behind other "monument builders" in history. The pharaohs of Egypt used tens of thousands of slaves and vast resources to build the pyramids, gigantic tombs to house pharaoh after death. Adolph Hitler dreamed of a "1,000 year Reich" and sought his vision through conquest and genocide. The Soviet Union had its succession of five-year plans, slaughtering millions in the process but sending men into space.

Of course, the health care legislation in Congress isn't likely to reach those levels of human suffering as part of its efforts to satisfy the dreams of its advocates, but it is a democratic version of the same principle: pursuing one's vision of society at the expense of individual rights and freedom.

Thanks to Olympia Snowe's desire to respond to "history's call", we know where she stands.

The Pigs at the Trough Continue to Feed

Just when you thought the Obama administration might be running into bailout fatigue, think again.

The latest plan is to spend $35 billion to support lending to lower income people to buy homes.

The government has spent so much money on a myriad of bailouts, "stimulus" efforts, and increases on regular-way government spending, another $35 billion doesn't produce outrage.

But it should, as we perpetuate the policies that brought on the financial crisis: Federal Reserve created super-low interest rates and government subsidies for home buying. And all paid by people who work hard and pay taxes.

Guantanamo Dreamin'

The news this week that the Defense Department has approved releasing an additional 75 detainees at Guantanamo no doubt delights the left, but should be of grave concern to the rest of us.

Recall that the first detainees released over the years were considered the least dangerous, and a number of them have returned to the fight against America. The New York Times mentions that Mullah Abdullah Zakir, a former Guantanamo detainee, is a leading Taliban figure active in organizing a shadow Taliban government in Afghanistan.

While some of the 75 include Uighurs who probably don't pose a threat to the United States, the rest come from the already-reduced detainee population containing the most dangerous terrorists.

Barack Obama is considering giving the forces of terror a major victory in Afghanistan by retreating from what he only recently described as a "war of necessity" - and apparently wants to make it harder for America to succeed by releasing more detainees.

It is now clear that Obama is driven by promoting his "image" in the world, as exemplified by his UN performance to the disgust of French president Sarkozy. Obama's policies on Guantanamo reflect that same desire, to the detriment of America's security.

The question remains: how many Americans should die in order for the left to feel good about themselves for closing Guantanamo and for Obama's "image" to improve?

Congressional Shenanigans

Republican Congressman Darrell Issa is trying to get the House Oversight and Government Reform Committee to subpoena records from Countrywide Financial regarding its VIP mortgage program, which provided low-cost loans to politicians.

The committee's Chairman, Democrat Edolphus Towns, has prevented the subpoena from being voted on by committee.

And Towns got two such loans from Countrywide.

So the government watchdog committee is led by someone who may need watching over himself.

Rome Burned While Nero Fiddled

Barack Obama has devoted considerable resources and political capital on the international stage to Chicago's bid for hosting the 2016 Olympics.

The Wall Street Journal reports that the Obama administration lobbied nations at the UN General Assembly, the G-20 summit, and a reception for African diplomats. Most prominently, the President and Michelle Obama personally met with the International Olympic Committee to lobby for Chicago's bid.

And Chicago lost.

For those who thought America's image in the world had changed for the better and that it would result in benefits for our country, this is further evidence that the international politics and foreign policy is more than about personalities.

Obama may be liked overseas, but that pales in comparison to awarding the Olympics (Rio de Janeiro won) for the first time to a South American nation and to snubbing America while doing so.

Moreover, the President is spending a meaningful amount of time and effort to do his hometown a favor while pressing matters weigh on the nation such as Iran's nuclear program and winning the war in Afghanistan.

Georgia, RIP

The EU has produced a whitewash report on the war between Russia and Georgia, saying both sides were at fault. In particular, the report said Georgia started the war by firing the first shot.

But the report said Russian troops entered Georgia before being fired at. So according to European diplomats, Russia can invade another country by marching across its border, and as long as it holds its fire until the invaded nation responds, the fault lies with the invaded nation.

This obscene report is designed to avoid antagonizing Russia, since amongst other things, the country supplies a significant portion of Europe's supply of natural gas.

So notwithstanding Europe's worries about global warming, it is so concerned with protecting its gas supplies that truth, justice, and freedom in Georgia take a back seat to good relations with Russia.

Good News?

The left must be pleased with recent reports that income inequality has decreased during the recession. Unfortunately, this change has been a result of decreases in the income of the wealthiest Americans, not increase in the incomes of the poorest.

Nothing captures the egalitarian problem more succinctly: would you rather everyone be poorer but more equal in the poverty, or everyone richer but with income disparities?

The recession, and its impact, illustrate this isn't an idle question.