It’s Wednesday, August 31st, 2011….and here’s the Gouge!

Leading off the top of the order in the mid-week edition, it’s the “The More Things “Change”, The More They Stay The Same” segment, courtesy of the WSJ and the most profligate political party in our nation’s history:

Bank of Political Works

A Fannie Mae for ‘infrastructure.’

Here’s a novel idea: Have Congress create a “bank” that could borrow huge sums with only a small federal outlay and would be independent of any political interference. If you believe in this miracle, you probably thought Fannie Mae was a private company that wouldn’t cost taxpayers a dime.

We’re referring to Washington’s latest marketing tool to sell spending to a skeptical public, a new federal “infrastructure bank.” For the low, low price of $30 billion or so, President Obama says Congress can conjure hundreds of billions in new “grants and loans” to rebuild “roads, bridges, and ports and broadband lines and smart grids.”

He says the bank would put “all those construction workers” back to work and “be good for the economy not just for next year or the yearafter that, but for the next 20 or 30 years.” In a cats and dogs living together moment, the Chamber of Commerce and the AFL-CIO are both in favor. Since both unions and construction companies would be beneficiaries, this alone ought to give taxpayers pause.

This is the Fannie Mae model applied to public works. The new bank would be a government-sponsored enterprise, or GSE, whether or not anyone admits it. The bank would have an implicit subsidy for its debt because it is backed by the government. And the debt it issued would be “off-budget,” which means it wouldn’t show up in annual outlays. When she first proposed the concept in 2008, Connecticut Democrat Rosa DeLauro explicitly described the bank as a “public private partnership like Fannie Mae.”

Such an outfit will inevitably be politicized, as similar examples have been all over the world. Japan’s postal bank has been used for decades to finance public works. Japan’s roads and bridges are grand but its economy has grown little in 20 years. Agribanks, regional development banks, Brazil’s BNDES national bank have all become vehicles for the political allocation of credit.

Ms. DeLauro’s bill admits as much, stating that the bank must take into account the “economic, environmental, social benefits and costs” of the projects seeking financial assistance. Among the considerations: responsible employment practices, use of renewable energy, reduction in carbon emissions, poverty and inequality reduction, training for low-income workers and public health benefits.

No one disputes that American public works need improving, and government has been spending huge sums to do so. As the nearby table shows, between 2001 and 2011 federal “public physical capital investment outlays” more than doubled to $330 billion from $142 billion. Every major area of infrastructure—transportation, Army Corps of Engineers, energy—is up by at least 75% in a decade.

The scandal is that we buy so little brick and mortar with all this money. Earmarking has wasted billions and is an inevitable byproduct of a system that collects federal taxes and allows Congressmen to send it back to their districts. The bank is supposed to eliminate earmarking, but the Members will surely find a way to influence the bank’s lending too.

Taxpayers also get less for their money because federal projects must follow Davis-Bacon Act rules that require “prevailing wages.” This law has come to mean de facto union wages on all public projects, inflating costs by 10% to 30%, depending on the project and location. Democrats and Republicans both refuse to relax Davis-Bacon rules, and the infrastructure bank would require them. The bank would also divert dollars to the mass transit lobby, which favors rail projects that serve a tiny fraction of commuters.

Instead of a Washington-centric bank that picks winners and losers, Congress would be wise to move in the opposite direction: devolving most public-works decisions to the state and local levels so users decide whether they want to finance a new school, bridge or water system. The feds can focus on maintaining the interstate highway system and then let states and localities choose what to fund. Arizona Rep. Jeff Flake and others have bills that would let states opt out of the federal highway program in return for getting back the federal gas tax money that its residents send to Washington.

GOP Congressman John Mica of Florida, Chairman of the House Transportation and Infrastructure Committee, is no fan of a federal infrastructure bank. He says he wants more state and local control of funds because “that way they won’t have to come to Washington to get approval.”

Mr. Mica is dealing with a reality that eludes many in both parties: With a $1.28 trillion deficit, Uncle Sam can’t afford to keep serving as paymaster to states and localities. The infrastructure bank is merely a new gimmick to maintain the old system.

And since it’s always good to know what the enemy’s thinking, here’s a related item undoubtedly near and dear to Congresswoman DeLauro’s heart: the latest gambit by the Left to buy votes with your tax dollars, courtesy of one Daniel Hamermesh, a professor of economics at the University of Texas:

Ugly? You May Have a Case

Beauty is as much an issue for men as for women. While extensive research shows that women’s looks have bigger impacts in the market for mates, another large group of studies demonstrates that men’s looks have bigger impacts on the job.

Why this disparate treatment of looks in so many areas of life? It’s a matter of simple prejudice. Most of us, regardless of our professed attitudes, prefer as customers to buy from better-looking salespeople, as jurors to listen to better-looking attorneys, as voters to be led by better-looking politicians, as students to learn from better-looking professors. This is not a matter of evil employers’ refusing to hire the ugly: in our roles as workers, customers and potential lovers we are all responsible for these effects.

How could we remedy this injustice? With all the gains to being good-looking, you would think that more people would get plastic surgery or makeovers to improve their looks. Many of us do all those things, but as studies have shown, such refinements make only small differences in our beauty. All that spending may make us feel better, but it doesn’t help us much in getting a better job or a more desirable mate.

A more radical solution may be needed: why not offer legal protections to the ugly, as we do with racial, ethnic and religious minorities, women and handicapped individuals?

We actually already do offer such protections in a few places, including in some jurisdictions in California, and in the District of Columbia, where discriminatory treatment based on looks in hiring, promotions, housing and other areas is prohibited. Ugliness could be protected generally in the United States by small extensions of the Americans With Disabilities Act. Ugly people could be allowed to seek help from the Equal Employment Opportunity Commission and other agencies in overcoming the effects of discrimination. We could even have affirmative-action programs for the ugly.

The mechanics of legislating this kind of protection are not as difficult as you might think. You might argue that people can’t be classified by their looks — that beauty is in the eye of the beholder. That aphorism is correct in one sense: if asked who is the most beautiful person in a group of beautiful people, you and I might well have different answers. But when it comes to differentiating classes of attractiveness, we all view beauty similarly: someone whom you consider good-looking will be viewed similarly by most others; someone you consider ugly will be viewed as ugly by most others. In one study, more than half of a group of people were assessed identically by each of two observers using a five-point scale; and very few assessments differed by more than one point.

For purposes of administering a law, we surely could agree on who is truly ugly, perhaps the worst-looking 1 or 2 percent of the population. The difficulties in classification are little greater than those faced in deciding who qualifies for protection on grounds of disabilities that limit the activities of daily life, as shown by conflicting decisions in numerous legal cases involving obesity.

There are other possible objections. “Ugliness” is not a personal trait that many people choose to embrace; those whom we classify as protected might not be willing to admit that they are ugly. But with the chance of obtaining extra pay and promotions amounting to $230,000 in lost lifetime earnings, there’s a large enough incentive to do so. Bringing anti-discrimination lawsuits is also costly, and few potential plaintiffs could afford to do so. But many attorneys would be willing to organize classes of plaintiffs to overcome these costs, just as they now do in racial-discrimination and other lawsuits.

Economic arguments for protecting the ugly are as strong as those for protecting some groups currently covered by legislation. So why not go ahead and expand protection to the looks-challenged? There’s one legitimate concern. With increasingly tight limits on government resources, expanding rights to yet another protected group would reduce protection for groups that have commanded our legislative and other attention for over 50 years.

We face a trade-off: ignore a deserving group of citizens, or help them but limit help available for other groups. Even though I myself have demonstrated the disadvantages of ugliness in 20 years of research, I nonetheless would hate to see anything that might reduce assistance to groups now aided by protective legislation.

You might reasonably disagree and argue for protecting all deserving groups. Either way, you shouldn’t be surprised to see the United States heading toward this new legal frontier.

 Turning from the ridiculous to the sublime, here’s the latest from Thomas Sowell:

An Unusual Economy?

Many in the media are saying how unusual it is for our economy to be so sluggish for so long, after we have officially emerged from a recession. In a sense, they are right. But, in another sense, they are profoundly wrong. (My, THAT would be a first!)

The American economy usually rebounds a lot faster than it is doing today. After a recession passes, consumers usually increase their spending. And when businesses see demand picking up, they usually start hiring workers to produce the additional output required to meet that demand.

Some very sharp downturns in the American economy, such as in the early 1920s, were followed quickly by bouncing back to normal levels or beyond. The government did nothing — and it worked.

In that sense, this is an unusual recovery in how long it is taking and in how slowly the economy is growing — while the government is doing virtually everything imaginable. Government intervention may look good to the media but its actual track record — both today and in the 1930s — is far worse than the track record of letting the economy recover on its own.

Americans today are alarmed that unemployment has stayed around 9 percent for so long. But such unemployment rates have been common for years in Western European welfare states that have followed policies similar to policies being followed currently by the Obama administration. Those European welfare states have not only used the taxpayers’ money to hand out “free” benefits to particular groups, they have mandated that employers do the same. Faced with higher labor costs, employers have hired less labor.

The vast uncertainties created by ObamaCare create a special problem. If employers knew that ObamaCare would add $1,000 to their costs of hiring an employee, then they could simply reduce the salaries they offer by $1,000 and start hiring.

But, since it will take years to create all the regulations required to carry out ObamaCare, employers today don’t know whether the ObamaCare costs that will hit them down the road will be $500 per employee or $5,000 per employee. Even businesses that have record amounts of cash on hand are reluctant to gamble it by expanding their hiring under these conditions.

Many businesses work their existing employees overtime or hire temporary workers, rather than get stuck with unknown and unknowable costs for expanding their permanent work force.

As unusual as 9 percent unemployment rates may seem to the current generation of Americans, unemployment rates stayed in double digits for months and years on end during the 1930s. Franklin D. Roosevelt’s administration followed policies very similar to those of the Obama administration today. He also got away with it politically by blaming his predecessor.

Speaking of unknown and unknowable costs, the WSJ details the latest half-truths and patent prevarications to emanate from the presidential penumbra:

Mere Proposals

The President reports on regulation.

Among the core assumptions of modern liberalism is that future regulations have no more effect on the economy than future taxes, as if expectations don’t matter and businesses don’t prepare now for their costs tomorrow. President Obama’s letter to John Boehner yesterday is a classic of the genre.

Last week the Speaker asked the White House to disclose any federal rules in the works with economic costs of $1 billion or more. Proposed or final rule-makings are defined as “major” when their estimated annual costs exceed $100 million. The Obama regulatory agenda for 2011 contains 219 such items. Last year, that figure was 191, versus the combined total for the first two years of the Bush Administration of 103. Amid this surge, Mr. Boehner’s underlying point was that the regulatory ambitions of the Obamanauts are redefining “major,” much in the way trillion is the new billion for government spending.

Mr. Obama responded by identifying seven pending major rules topping $1 billion, like the Department of Transportation’s federal motor vehicle safety standard No. 111 for rearview mirrors ($3 billion) and the Environmental Protection Agency’s ozone regulations (as much as $90 billion). But even that understates the costs, as Mr. Obama explains at length. The regulatory agenda is “merely a list of rules that are under general contemplation” and “merely proposed” and “includes a large number of rules that are in a highly preliminary state, with no reliable cost estimate.”

In other words, regulations that the Administration plans to issue don’t count. The President’s health-care plan doesn’t affect hiring because it doesn’t really kick in until 2014, and the Dodd-Frank financial reregulation isn’t a drag on lending because no one knows what dozens of agencies may do, except that it will be very expensive.

Mr. Obama adds that “it is extremely important to minimize regulatory burdens and to avoid unjustified regulatory costs.” That “unjustified” is doing a lot of work in that sentence, but we’ll merely note that you can’t minimize or avoid them if you pretend they don’t exist until they formally enter the Federal Register.

Which brings us to today’s Money Quote, courtesy of Tom Bakke, and Walter Williams’ response to a question regarding Washington’s spending-as-usual:

“….We can blame politicians a little bit, but the bulk of the blame lies with the American people. That was kind of an epiphany for me. During the 1980s, I would occasionally have lunch with Senator Jesse Helms from North Carolina. He knew that I was highly critical of agricultural subsidies, handouts to farmers.

Something Jesse Helms told me at one of our luncheons made me realize some things I had not realized until then. He said, “Walter, I agree with you 100% that these farm subsidies ought to be eliminated.” But then he asked, “Can you tell me how I can remain the senator from North Carolina and vote against them? If I do what you say, I would be voted out of office.”

http://www.zerohedge.com/news/walter-williams-2012-election-and-sound-money 

To which Williams should have immediately responded, “And this would hurt the country….how?!?”

And in the Environmental Moment, Bill Meisen provides further evidence of the duplicitous hypocrisy that is “green” energy:

County rules wind farm’s noise not a problem

Neighbors intend to appeal decision to Oregon Land Use Board of Appeals

An Eastern Oregon wind farm won’t have to curb its noise after a county commission decided not to enforce state noise requirements. The county commission, called the Morrow County Court, voted 2-1 that although noise from the Willow Creek wind project exceeds state standards at a few homes, the violations did not warrant enforcement action. “There might be some violations,” said Commissioner Ken Grieb, “but we don’t think they’re significant enough to take action.”

Morrow County granted the 48-turbine Willow Creek project a permit in 2005. Reports say outraged neighbors began to complain about the noise from the project soon after.

“I’m flabbergasted,” said Jim McCandlish, a lawyer for three of the neighbors, after the vote. “The county court has an obligation to protect the health and welfare of its citizens.” McCandlish said his clients’ constitutional right to due process was being denied, and said the neighbors intend to appeal the decision to Oregon Land Use Board of Appeals.

The Oregon Department of Environmental Quality wrote the state’s industrial noise control regulations and used to enforce them. The laws still are on the books, but the department terminated its noise control program in 1991 because of budget cuts, leaving enforcement up to local agencies.

Morrow County adopted the state’s noise control rules and asks wind projects to comply as part of the site certification process. Project developer Invenergy acknowledges the project violates noise standards, but insists the violations are minimal and infrequent. Kerrie Standlee, an acoustic expert hired by the wind farm’s neighbors, disagrees and said Invenergy is understating the problem.

Standlee said the wind farm consistently broke the noise rule at precisely the time when Invenergy’s expert decided not to use the study data, when wind speeds exceeded 9 meters per second. Standlee said the wind project broke the noise rule by more decibels, and more frequently, than Invenergy claimed. The Morrow County Court only accepted testimony from the Invenergy expert.

The vote was 2-1, but none of the commissioners sided with the neighbors – County Judge Terry Tallman voted against the motion, but only because he was against the vote itself. “We don’t have the funds to force compliance,” Talman said. “The state of Oregon says it doesn’t have to do it, because it doesn’t have the funds. Why are we being forced to live by a higher standard than the state of Oregon?”

On the Lighter Side….

Finally, as today’s installment of News of the Bizarre, forwarded again by Bill Meisen, conclusively demonstrates, when ya gotta go, ya gotta go:

Man decapitates himself after Yorktown domestic dispute

A man is dead after decapitating himself following a domestic dispute in Yorktown. Yorktown sheriff deputies initially responded to reports of a domestic disturbance in the 100 block of Nathan Place around 10am this morning and learned the man had left before they had arrived. A few minutes later a utility trailer was reported on fire nearby at the intersection of Holmes Blvd and Wolftrap Rd.

When deputies and firefighters arrived they found the man inside the white Ford Explorer that had been towing the trailer. The man had apparently set the trailer on fire and refused to leave the SUV. A Fire Dept. officer noticed a cable attached to a nearby tree and wrapped around the neck of the driver. When deputies tried to get the man to leave the Explorer, he rapidly accelerated the SUV and was pulled from the vehicle and decapitated.  The Explorer came to rest approximately 150 yards further down Holmes Blvd.

Oooh….now THAT had to leave a stain!

Magoo