Calling John Galt

FHA is the New Fannie

So it looks like the FHA, which guarantees lots and lots of home loans, is well on its way to needing a huge, Fannie-style bailout.  From the WSJ:

…Federal Housing Administration, the nation’s insurer of nearly $750 billion in outstanding mortgages. The agency acknowledged this month that a new but still undisclosed HUD audit has found that FHA’s cash reserve fund is rapidly depleting and may drop below its Congressionally mandated 2% of insurance liabilities by the end of the year.

At a 50 to 1 leverage ratio, the FHA will soon have a smaller capital cushion than did investment bank Bear Stearns on the eve of its crash.

The basic problem is that the FHA guarantees every dollar of a loan, leaving neither the borrower nor the originator at risk in case of a default.  Combine that with incredibly low down payment requirements for these loans and it’s a(nother) disaster waiting to happen.

One simple fix would be for the FHA guarantee to cover only 90% of the loan, in which case the lender would still have to care about the creditworthiness and default likelihood of the borrower, rather than dishing it all off to the taxpayers.

Methapplication of the Law

Indiana grandmother busted under anti-meth law:

Sally Harpold is a grandmother of triplets who bought one box of Zyrtec-D cold medicine for her husband at a Rockville pharmacy. Less than seven days later, she bought a box of Mucinex-D cold medicine for her adult daughter at a Clinton pharmacy, thereby purchasing 3.6 grams total of pseudoephedrine in a week’s time.

Those two purchases put her in violation of Indiana law 35-48-4-14.7, which restricts the sale of ephedrine and pseudoephedrine, or PSE, products to no more than 3.0 grams within any seven-day period.

By law, Harpold could get up to 60 days in jail and up to a $500 fine. As written, the law makes no distinction about why you bought the medicine or your intent.

Just as with any law, the public has the responsibility to know what is legal and what is not, and ignorance of the law is no excuse, the prosecutor said.

“I’m simply enforcing the law as it was written,” (prosecutor Nina) Alexander said.

Well, at least when the government is in charge of all health care, she won’t have a choice of family member for whom to purchase medicine.

Regulators Gone Amok

One of the key reasons I prefer my government small comes down to a simple axiom:

The smaller and less-powerful a government is, the less likely it is to become a target for lobbying and influence-peddling.

Businesses and industries often use the power of the state to enforce limits on competition. Often these limiting factors come in the form of regulation or unnecessary licensing. And because the real intent of these regulations is protectionist in nature, it is easy to ignore thoughts of the unintended consequences.

Such as the case of a Michigan woman, who is openly flouting the law by watching the neighbor kids at the bus stop:

photo: Grand Rapids Press

Lisa Snyder of Middleville says her neighborhood school bus stop is right in front of her home. It arrives after her neighbors need to be at work, so she watches three of their children for 15-40 minutes until the bus comes.

The Department of Human Services received a complaint that Snyder was operating an illegal child care home. DHS contacted Snyder and told her to get licensed, stop watching her neighbors’ kids, or face the consequences.

One lawmaker is already trying to craft an exception, which comes a little late for Snyder, who claims she’s been ordered to pay a $1,000 fine and faces up to 90 days in jail. Nice move, but somewhat too-little-too-late.

Oh… and how exactly did these intrepid investigators strike fear into the heart of Snyder, the “illegal daycare kingpin?”

A neighbor filed a complaint.

Think about that for a moment. A law-abiding citizen turned in a neighbor over something that was technically illegal, but shouldn’t have been.

So how hard was it supposed to be for people to turn in “suspect” information about health-care proposals to whitehouse.gov? (where opinions could get you on a list sanctioned by the executive branch.)

I feel a chill.

Obama Children

Community Organizing, at the first grade level.

A reminder about what the 2nd Amendment is all about

Do they even work

The government bailouts of this that and everything in between. Last week we learned that President Obama is open to newspaper bailouts, and now some are talking about a $4billion bailout of the US Postal Service. My question is simple, do bailouts work as a way to put the bailed out organization in a competitive and profitable position for the long term?

Seems like a silly question I know. We have been providing money to Amtrak, the USPS, and many others since their inception. However, if they don’t work why do we keep throwing good money after bad? I personally don’t agree with the argument that we even need an Amtrak or USPS, but I can see why others do.

But taking this to the next level, bailouts of GM, Chrysler, newspapers, and banks? Really, how is that working out for us? GM and Chrysler continue to slide away into the dustbin of history. The banks are “stabilized” but for how long? Newspapers? They haven’t reported actual news in quite some time and as a result have seen subscriber and ad dollars plummet.

Yes, I know Craigslist has eaten their lunch in the lucrative classifieds market, but so what. That happens all the time.

But, back to the USPS. Are they even needed anymore? Shouldn’t we be asking THAT question? If they aren’t, then why do we continue to throw good money after bad?

In the very best of hands

Crybabies in the White House.

Not Barack Obama and his White House. The president snubbed Wallace and Fox News in his flurry of visits to Sunday news shows tomorrow, and last night, Wallace told Fox colleague Bill O’Reilly that Obama’s team is just as petty as their boss.

“These guys, everything is personal. I gotta tell you, everything,” Wallace said. “They are the biggest bunch of crybabies I have dealt with in my 30 years in Washington.”

This doesn’t bode well for a legitimate debate… on any issue.

Way too soon

To compare President Barack Obama to the Jimmy Carter. Though, if things continue along this path, it may not be that far fetched.

Thumbs down to a handout

Will the last free-market enthusiast in the media turn off the light on the way out?

Wait!  Not so fast!  There is hope!

From Slate:

When President Barack Obama told the Toledo Blade last week that he hoped that the faltering newspaper industry would recover because “fact-based” and “investigative reporting” are “absolutely critical to the health of our democracy,” even some of the cynical bastards who staff the nation’s dailies swooned.

Of course, the president didn’t pay anything more than lip service to the newspapers. He remained, in the Blade’s words, “noncommittal” about the bills, including one by Sen. Benjamin L. Cardin, D-Md., introduced early this year that would allow newspapers to reorganize themselves as nonprofits. “I haven’t seen detailed proposals yet, but I’ll be happy to look at them,” Obama said.

The good news is there are journalists, like Jack Shafer (author of the Slate piece), who see this as a threat:

Here’s hoping that the White House’s detailed-proposals czar keeps the Cardin bill out of Obama’s hands. The last thing newspapers need is the sort of help from the government that turns them into NPR, endlessly begging for contributions, pursuing wealthy philanthropists, and standing in line for government handouts.

Shafer also quotes from Donald Kimelman from the Boston Globe:

Why should the tax laws give an advantage to newspapers over other kinds of media? How will the recipients of philanthropic dollars avoid having their news agendas distorted by donor preferences? Would the crutch of donor support hinder the search for new commercial revenue necessary for news organizations’ long-term viability?

Of particular interest is the recognition that the newspaper industry has already suffered from the Unintended Consequences of other interventions.

I haven’t done this piece justice… so please click through and read it for yourself.

Here’s to the hope that journalists can turn use these same notions to be just as critical of other bailout and spending plans, that have their own Unintended Consequences.

So crazy, it just might work

Sweden slashes income taxes to help stimulate growth. Will our elected leaders be so brave?