Buddy Roemer almost has it right

Former Louisiana Governor Buddy Roemer (R-LA), appeared on Weekends with Alex Witt opining on what presidents need to be effective. Mr. Roemer cited freedom from money in politics and freedom from special interests as necessary for any president to be independent to lead.

What Mr. Roemer failed to mention was that any president will also need freedom from their respective parties. Parties, while having seen a decline in their influence over elections, still provide an efficient mechanism for slating candidates and can leverage voter affiliation to get voters to the booth.

The problem is that party platforms may be out of sync with practicality. December 2010 saw Mr. Obama make a jagged move to the middle on tax cuts for small businesses when Democrats were hoping for a little more aggressive posture on jacking up taxes on rich people. Had Mr. Obama stayed left versus moving center, he may have found himself in a much tighter race with Messrs. Gingrich and Romney.

So how should a president free themselves from special interest money and party politics? How soon should they make a run for the middle once they become president?

Housing policy should move property into hands that can afford the payments

Insightful article on housing policy posted in The Wall Street Journal. The article describes three ways to aid the housing market. They include:

• Financing investors willing to clear up the excess housing stock, especially in light of falling housing prices and increasing rental rates;
• Finalizing federal regulations for the housing market
• Reducing debt for troubled house owners

Question. Would it have been best for the Obama Administration to finance individuals and small companies that intend to clear excess inventory, turning them into rental properties?

President Obama’s home modification program targeted homeowners with the policy goal of keeping consumers in their homes. It’s questionable how much macroeconomic activity this policy has generated.

If, on the other hand, financing had gone to investors, individuals and entities with the resources to maintain distressed properties and rent them out, the renovations necessary for maintaining and preparing these properties for rent would have stimulated the ancillary activities we tend to find surrounding property, from landscaping to plumbing to electrical work.

The flow of capital and credit combined with a little job creation. Isn’t this what government should be about?

The Carpetbaggers head to Florida

Newt Gingrich did his version of the comeback kid last night, upsetting the once and future frontrunner in the South Carolina primary. Mr. Gingrich won 40% of the vote while Mr. Romney picked up 28% of the vote. Rick Santorum, the failed senator from Pennsylvania managed to sell his social conservative family values story to 17% of South Carolinians while my nine-year old’s favorite, Ron Paul, took 13% of the vote.
The candidates head to Florida where the outcome may be just as surprising. South Florida is basically made up of West Indians, Cubans, and misplaced northerners. Mr. Romney may do well there, as long as he doesn’t admit to being a New England Patriots fan. The “I love capitalism” message should sell among my Spanish and English speaking Caribbean people.

On the other hand, the social value spiel will sell in parts of central and all of north Florida. Mr. Gingrich, who is southern bred, is showing a penchant to connect to southerners in a way that would make Barry Goldwater and Ronald Reagan proud. He’ll thump the Bible without thumping it; talk about guns without having to show he ever shot one.

Mr. Santorum will get a polite welcome, but north Florida is the south for all intents and purposes; therefore, Mr. Santorum will be on the receiving end of a welcome deserved by your average carpetbagger.

Man, do I miss Tallahassee. May have to head down there to cover the Florida primary in person. I give the slight edge to Mr. Gingrich.

Obama wants to reorganize Commerce. Right start, but will it sell?

President Barack Obama today announced a reorganization of the U.S. Department of Commerce and five other agencies including the Small Business Administration and the U.S. Trade Representative. Mr. Obama’s major argument for the restructure is the need for the federal government to be more efficient in its ability to respond and aid American business.

To get the reorganization going, Mr. Obama will ask Congress to grant him the authority to reorganize the agencies upon receiving permission from Congress on a simple up or down vote. This authority had been granted to presidents between 1932 and 1984.

While Congress ponders this request, Mr. Obama intends to lift the Small Business Administration to the level of a cabinet agency.

I think this is a good move in the right direction although I remain suspect as to whether the move is steeped solely in getting the biggest bang out of the taxpayer buck or a political move to put the GOP in the embarrassing position of not saving $ 3billion over the next ten years by downsizing government while reducing the deficit.

It’s bad enough that Republican Texas Governor Rick Perry couldn’t name the three he wanted to eliminate. At least the president is helping him out with one of them. It’s also bad that the GOP’s identity problem when it comes to free market capitalism (are we simple job creating communists or haters of capital formation or high returns fascists) is coming to the fore. As a political move, Mr. Obama’s timing, right before the 535 yahoos return from celebrating the winter solstice, is just about right.

Fed governor wants to see more emphasis on enforcement

Federal Reserve Governor Sarah Bloom Raskin gave a speech last week at the Association of American Law Schools annual meeting last week in Washington, DC. The gist of her speech was that law schools should also include a discussion on enforcing law when teaching their students about the rule of law.

“If the law is worth having, the law is worth enforcing”, said Governor Raskin. Specifically, Governor Raskin was addressing the enforcement of law against mortgage service and processing companies and how proper enforcement could help rein in bad behavior by processors. If not, we run the risk of these companies framing the intensity at which regulatory agencies go after them.

Governor Raskin also quipped that, “[A] failure by regulators to enforce the laws and regulations as strong antidotes to financial misconduct and unsafe and unsound practices by the institutions they regulate establishes de facto acquiescence to the dominant norms of the financial marketplace. At that point, our laws become the resting place for unfair practices and broad disrespect for the law generally.”

What concerned me were her observations at the end of her speech. “What’s more, financial institutions need to understand that they are responsible for assessing the effects their actions will have on consumers and the country as a whole, and factor those considerations into their business decisions.”

Talk about a dampening effect on business decision making. You may as well ask financial institutions to factor in the weight of the world when determining their pricing. Consideration equals delay. Delays equal higher costs of doing business, costs that may not be captured fully in interest rates and fees assessed on consumers.

The premise of this thinking obviously stems from the argument that at the heart of the recession and its slow recovery is bad behavior on the part of mortgage processors, servicers, and big banks, as well as the foreclosures resulting from their bad behavior. I can buy-off on the argument that decreased home values left little in the kitty for consumers to use to fund small business ideas, but I don’t give shrinking equity that much credit for the slow-down in private sector investment that lies at the heart of any economic downturn.

Ass-backwards bankruptcy

The Wall Street Journal posted an article about an alternative method of debt collection. Debt collection companies are issuing credit cards to consumers whose debts have expired under state debt collection laws. As a condition for getting a fresh start on being a good credit citizen, recipients of the cards agree to pay a portion of the expired debt.

Sounds like a low cost alternative to the consumer filing for bankruptcy, assuming they can endure the calls and letters from debt collectors during the three to ten year period between the last debt payment and the statutory limit for collecting the debt. Yes, the card issuer should make it clear that part of the terms and conditions of getting the card is that part of the old debt must be repaid. If that transparency requirement is met, then the government should stay out of this market.

What do you think? Should government get involved in this trending market?

Rick Perry is recruiting bloggers

Interesting tid bit in the digital advocacy realm. Of the six remaining GOP hopefuls, three appear to be actively
recruiting volunteers for their social media campaigns. The three are Jon Huntsman, Newt Gingrich, and Rick Perry.

Rick Perry and Jon Huntsman in particular are seeking out bloggers for their campaigns while Newt Gingrich is asking in general whether volunteers would like to use social media to promote him.

Jon Huntsman refers to his blogging posse as Hbloggers while Rick Perry offers a colorful array of buttons that bloggers can add to their websites. It kind of reminds me of Brannif Airways with their multi-colored airplanes. We all remember what happenned to Brannif.

More importantly this is an example of how important broadband in particular and the Internet in general is when it comes to political efficacy and involvement. More opportunities are being made available to provide indviduals greater participation in the political process.

The political morning after

Campaigning for the presidency and then being faced with the realities of the office and the role of government are two different things. All politicians go for the political “quick buck”; promise what this government is not designed to nor intended to deliver then after the campaign have to deal with the lowered expectations and daunting realities.

Lets keep it real.

Politicians “seduce” and most of us fall for the whispered “sweet nothings.” America was built by the investor class and the government protects and promotes that class. If you are on that side of the equation, excellent. If not, you’re screwed, and quite frankly, you should be.

The other role of government is to defend the country’s national interests. If “peace” brings that about, fine. If war is necessary, you wage it as a last option. There is no in between. This has been the way of states since energy and matter got together to form this physical realm.

Government, thank goodness, is limited in what it can and should do. When any person steps into the Oval Office, we see this very quickly. This is why we should vote with a knowledge of how government works and not with any emotion, heightened expectations, or notions of baseless romance.

Government is business.

Senate up next to consider HR3630

White House spokesman, Jay Carney, laid this statement on Republicans in Congress.

“This Congress needs to do its job and stop the tax hike that’s scheduled to affect 160 million Americans in 18 days. This is not a time for Washington Republicans to score political points against the President. It’s not a time to refight old ideological battles. And it’s not a time to break last summer’s bipartisan agreement and hurt the middle class by cutting things like education, clean energy, and veterans’ programs without asking the wealthiest Americans to pay their fair share.

This is a time to help the middle class and all those trying to reach it by extending a tax cut worth $1,000 for the average family. The President has been very clear: Congress should not finish their business before finishing the business of the American people. They cannot go on vacation before agreeing to prevent a tax hike on 160 million Americans and extending unemployment insurance. That is simply inexcusable in this economy. It is our expectation that in the eleventh hour Congressional Republicans and Democrats will come to an agreement to protect the middle class and finish their budget work for the year.”

The Senate finished its business after 7:00pm this evening, but have not placed HR3630 on its agenda yet. I believe that they will get a bill on President Obama’s desk by Friday. These guys want to go home (and quite frankly need to stay there).

Is this really how we should pay for a payroll tax reduction?

Informative post in The Wall Street Journal about how House Republicans, Senate Democrats, and the Obama Administration are proposing to pay for the extension of the reduction in payroll taxes. The parties are exploring increasing fees that Fannie Mae and Freddie Mac assess lenders when lenders sell their mortgages to Freddie and Fannie.

Payroll taxes are used to pay for items such as social security and unemployment compensation insurance premiums.

At first blush, you have to ask yourself why would Congress and the White House want to continuously risk underfunding social security and unemployment compensation insurance by basically reducing the premiums paid for these programs?

Second, why increase the fees to lenders and not use the increased fees to offset costs for operating Fannie and Freddie?

I hate to use the phrase shell game, but this is simply what this policy boils down to. Breaking and entering at Fannie and Freddie in order to fund a drug fix. This time the drug fix is unfunded expectations.

In addition, how does this policy create jobs and put our resources to work?