December 12, 2005

Bizzy’s AM Coffee Biz-Econ Links (121205): Misplaced Priorities in Congress

Filed under: Economy,Taxes & Government — Tom @ 8:01 am

Example 1: “The Inalienable Right to a Remote”

George Will rips Congress for wanting to shower money on the digital TV-deprived (may require free registration; worth it for just this column):

What will become of households that do not (convert by 2009)? Leaving aside such eccentric alternative pastimes as conversation and reading, the digitally deprived could pursue happiness by buying a new television set, all of which will be digital-capable by March 2007. Today a digital-capable set with a flat-screen display can be purchased from — liberals, please pardon the mention of your Great Satan — Wal-Mart for less than $460. But compassionate conservatism has a government response to the crisis.

….. The $990 million House version of this entitlement — call it No Couch Potato Left Behind — is (relatively) parsimonious: Consumers would get vouchers worth only $40 and would be restricted to a measly two vouchers per household. The Senate’s more spacious entitlement would pay for most of the cost — $50 to $60 — of the converter boxes. But there is Republican rigor in this: Consumers would be required to pay $10. That is the conservatism in compassionate conservatism.

….. Why does the legislation make even homes with cable or digital services eligible for subsidies to pay for converter boxes for old analog sets — which may be worth less than the government’s cost for the boxes?

Why indeed? I sense a boondoggle of E-rate proportions.

Example 2: Senate Enemy of Pork Can’t Practice Medicine

There is little doubt that it’s out of spite:

But senators weren’t happy about having their pork-addicted ways held up to ridicule. Few doubt that wasn’t part of the motivation a couple of days later for refusing to allow Dr. Coburn, an obstetrician, to earn just enough outside income so he could pay the expenses he incurs in delivering babies one day a week back home. Meanwhile, other senators continue to have carte blanche to earn outside income by writing song lyrics and novels that few believe would see the light of day were it not that they were famous as elected officials.

Update: There is much more detail from S.O.B. Alliance member Porkopolis on this, including news that Ohio Senator George Voinovich was among those voting to prevent Dr. Coburn from doing his work (which, by they way, had been permitted under House Ethics rules when Dr. Coburn was a congressman).

Example 3: Meanwhile, They Sleep as Securities Regulators Expand Their Reach to “Protect” Those Who Don’t Need It

Oh they say they only want to regulate hedge funds, but it’s not true (link requires subscription):

Although the SEC has stressed its intention to require registration of (only) hedge funds, the term most used in the rule is “private funds.” In a brief filed in the Goldstein case, the SEC indicates that this term could cover more than just hedge funds. It describes “private funds” as “a category of pooled investment vehicles that encompasses most hedge funds.” It also defines them as “entities that engage in securities transactions privately with each of their investors” and “that are marketed on the basis of the skill and expertise of the investment adviser.”

These features do describe hedge funds, but they also apply to most venture capital and private equity funds. Business lore portrays venture capitalists as the white knights of the marketplace, whereas hedge funds are often portrayed unfairly as black hats. But the organizational structure of the two entities is actually very similar.

Hedge, venture capital, and private-equity funds are supposed to be limited to well-heeled (“accredited”) investors who supposedly know what they’re doing, and who, if they get burned, can afford to take their losses. These people are big boys and girls–So why is Congress letting the Securities and Exchange Commission (SEC) get involved in this at all?

Response: GOP Primary Challengers (More, Please)

The Club for Growth (CFG) has endorsed a primary challenger to an incumbent GOP senator (official endorsement is here):

Today, the Club for Growth PAC will endorse Steve Laffey, the Republican Mayor of Cranston, R.I., in his primary challenge against Sen. Lincoln Chafee. Steve Laffey is a pro-growth, Reagan Republican. Sen. Chafee epitomizes the GOP’s waning commitment to limited government and economic freedom.

Sen. Chafee has consistently opposed tax cuts. Citing the federal deficit, he opposed the Bush tax cuts that have generated our powerful economic expansion. But his concerns about deficits don’t extend to government spending. Bills he has sponsored would add nearly a half-trillion dollars in new spending over 10 years.

….. Steve Laffey makes a stark contrast. After an inspiring climb from rags to riches, he returned to his hometown to run for mayor and rescue the city of Cranston from impending insolvency. As mayor, Mr. Laffey ruthlessly attacked the mismanagement that had caused Cranston’s problems. He cut costs, established financial controls, rooted out waste and took on bloated union contracts in the courts–as well as in the court of Rhode Island public opinion. Today, Cranston has recovered its investment-grade credit rating and the voters there have re-elected him twice. This in a city where only 14% of voters are Republicans!

….. After 10 years of controlling Congress, Washington Republicans have an identity crisis. It was Republicans who gave us a farm bill that only a Soviet central planner could love; a campaign-finance reform bill that expands government’s unconstitutional restrictions on speech; a prescription-drug entitlement program that Lyndon Johnson could only have dreamed of; and a transportation bill with more than 40-times as many pork projects it took to earn Reagan’s veto.

….. The party of Reagan has been reduced to this–which is why it’s time for Laffey vs. Chafee, the first skirmish in a very important battle.

It’s about time. Perhaps The CFG should take a closer look at Ohio’s GOP challengers to Mike DeWine.

UPDATE: Hugh Hewitt, who supported Specter over Toomey last year, is supporting Laffey: “Lincoln Chaffee gets all the big ones wrong. He should be retired.” That’s a good early sign. Let’s hope Bush Cheerleader Hugh doesn’t get cold feet if the President’s people try to prop up Chafee.

UPDATE 2: Opinion Journal’s Political Diary (no link available-surprise, it’s a Best of the Web substitute today) has a counterpoint on Laffey: “But if Mr. Laffey hopes to win the hearts of conservatives nationwide by unseating Senator Chafee, he’ll first have to explain a few things about his own record. As mayor of Cranston for the past three years, Mr. Laffey has increased taxes three times. The city now has one of the highest property tax rates in the state, and Mr. Laffey has said Cranston may “need” an additional tax hike in 2007. And while living in Tennessee in the 1990s, he gave money to Democratic senatorial candidates who ran against former Republican Sen. Fred Thompson and the current Senate Majority Leader Bill Frist. He even made a campaign contribution to Rep. Jesse Jackson Jr. ….. That said, Mr. Laffey has been able to raise more than $600,000 — about half of what’s in Senator Chafee’s war chest — and is likely to raise a lot more with the support of the Club for Growth. Mr. Laffey made his reputation in Cranston by locking horns with unions and installing cameras in government offices so he could catch bureaucrats dozing off on the job. Senator Chafee may not have been caught napping, but he does have a race on his hands.”



  1. If Laffey wins the nomination, he will be crushed. People from Rhode Island are looking to replace Chafee because of the “R” in front of his name, not because they would prefer Reagan-esque policies to Chafee’s moderate Republican principles. If Laffey were to win the primary, Pat Kennedy would likely emerge as the Democrat candidate and would win.

    Comment by Kevin Irwin — December 12, 2005 @ 8:28 am

  2. “They” said that about Pat Toomey and Arlen Specter in PA, and I think they were wrong.

    I’d like to see a conservative win a New England Senatorial seat. This looks like a good chance, because RI is a small state that can be won at the grass roots.

    I know you’re from up that way, and what you’re saying is certainly the conventional wisdom. A Laffey primary win would probably the best test of the CW there will be in 2006. Given that the GOP has a majority that isn’t going away, I’m willing to see this be the test case.

    Comment by TBlumer — December 12, 2005 @ 9:49 am

  3. You’re kidding right? Susan Collins and Olympia Snowe of Maine, Judd Gregg and John Sununu of NH all conservatives. They may not be in the mold of Bill Owens or Rick Santorum, but they are conservative Republicans. If you add Chafee and Jim Jeffords (former R, now I), Republicans have a majority in New England Senate representation.

    I’m close to RI, but am not entrenched in their politics. From what I know of Rhode Islanders, it would be incredibly difficult to convert them to the current republican model. The Chafee family represented the Goldwater libertarian republican era. I don’t see people from RI converting from that. It may be an interesting question to post to Chris from Two Babes…

    Comment by Kevin Irwin — December 12, 2005 @ 10:10 am

  4. #3, I must need another cup of coffee, because I forgot about the NH guys. But I think they are the only conservatives of the bunch. The Mainers are not reliable on values or taxes, or even judges. Also true with Jeffords.

    The Bushies have never come around to the idea that a party majority is nice, but a party majority that is also an ideological majority is better. That’s why I’d like to see Laffey get past Chafee, because from an ideological standpoint we have the least to lose. If it were 50-50 in the Senate, I’d be more hesitant.

    Comment by TBlumer — December 12, 2005 @ 10:42 am

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