TheDC Morning: All the subsidies in the world cannot turn a bad business idea into a good one

Mike Riggs Contributor
Font Size:

1.) OMB Director: ‘The budget is not just a collection of numbers’ — Office of Management and Budget Director Jacob Lew takes a spiritual approach to his job. “The budget is not just a collection of numbers, but an expression of our values and aspirations,” Lew wrote in the New York Times this weekend. And because the budget is a living metaphor much like the Constitution and Sarah Palin’s Facebook page, “[w]e cannot win the future”; cannot “out-educate, out-build, and out-innovate our rivals,” if we do not first get our crown chakra aligned with our spleen chakra and make some damn budget cuts. “We had to choose programs that, absent the fiscal situation, we would not cut,” writes Lew. First up: the community service block grants that gave Pres. Obama his start in politics–er, community organizing. “Since they were instituted, community service block grants have helped to support community action organizations in cities and towns across the country,” Lew writes. “Yet for the past 30 years, these grants have been allocated using a formula that does not consider how good a job the recipients are doing.” Ergo, the White House will cut funding for the program in half and insist that the process be more competitive. Why no one thought to do this at some point in the last 30 years is a question only the high budget priests can answer.

2.) Where is Obama’s plan to save us from Fannie and Freddie and the Japanese? — Does Pres. Obama think himself too cool for deadlines? Over the last six months, White House insiders and the president himself promised to submit a plan for “dealing” with Fannie and Freddie by January 31. For those keeping track, today is February 7. Fannie and Freddie’s “combined debt, guaranteed by taxpayers and held in large part by China and Japan, is more than $1.5 trillion,” bemoans the WaPo editorial board. “But the administration still hasn’t come out with anything, though we’re told it’s forthcoming.” No one–not even the sage members of the WaPo editorial board–has a bead on what the White House will announce. But everyone and his mother pretty much hopes that Obama decides to get out of the mortgage securitization game. “Government-backed mortgage securitization ended up distorting and destabilizing it,” goes the WaPo editorial. “The resulting misallocation of resources…is a true American tragedy” in the vein of last night’s Super Bowl ads.

3.) Rent seekers reject Obama’s promise to deregulate — “Amid calls for shrinking government, lawmakers across the country are vowing to cut regulations that crimp economic growth,” reports the WSJ. “Tell that to the cat groomers, tattoo artists, tree trimmers and about a dozen other specialists across the country who are clamoring for more rules governing small businesses.” These folks want licensing requirements for themselves and their competitors in hopes that hanging a fancy license above their shingle will allow them to charge more for their certified services. Economist Gordon Tullock calls this “rent seeking.” Not doing it is the 11th Commandment. What happens when legislators give in to rent seekers? Ask hard-working Texans who do not have time to get certified as “shampoo specialists”: The state requires “hair-salon ‘shampoo specialists’ to take 150 hours of classes, 100 of them on the ‘theory and practice’ of shampooing, before they can sit for a licensing exam. That consists of a written test and a 45-minute demonstration of skills such as draping the client with a clean cape and evenly distributing conditioner.”

4.) All the subsidies in the world cannot turn a bad business idea into a good one — “To turn wood chips into ethanol fuel, George W. Bush’s Department of Energy in February 2007 announced a $76 million grant to Range Fuels for a cutting-edge refinery. A few months later, the refinery opened in the piney woods of Treutlen County, Ga., as the taxpayers of Georgia piled on another $6 million. In 2008, the ethanol plant was the first beneficiary of the Biorefinery Assistance Program, pocketing a loan for $80 million guaranteed by the U.S. taxpayers,” writes the Washington Examiner’s Tim Carney. “Last month, the refinery closed down, having failed to squeeze even a drop of ethanol out of its pine chips.”

5.) Why won’t the NAACP scold Common Cause? — “In response to The Daily Caller’s request for comment on a video showing progressive protesters calling for somebody to ‘string up’ African American Supreme Court Justice Clarence Thomas, or ‘send him back into the fields’ or ‘cut off all his toes and feed them to him one-by-one,'” writes The Daily Caller’s Matthew Boyle, “NAACP spokesman Hilary Shelton pointed to the organization’s recent resolution calling for a ‘civil political discourse.'” What’s the opposite of internecine purity-testing? Oh yeah: Hypocritical cowardice! AWK-WARD!

6.) Florida governor to drop ‘political bombshell’ — “Calling for billions in tax and spending cuts, Gov. Rick Scott will unveil a budget Monday that’s as much a policy roadmap as it is a sweeping political statement,” writes the Miami Herald. But are they feasible? “Legislative leaders aren’t sure, noting that next year’s budget faces a shortfall of at least $3 billion and Scott proposes to make the hole even bigger by insisting on $2 billion more in tax cuts.” While Scott hasn’t announced what exactly he’ll cut, already there’s hope: He’ll have to piss off lobbyists in the process. “Scott’s budget could pick a fight with even more lobbying groups because he’s likely to rejigger the budget by eliminating certain designated pots of money known as trust funds.”

VIDEO: Chrysler’s post-bailout Super Bowl ad

Tags : mike riggs
Mike Riggs