Louisiana governor Bobby Jindal came in for criticism here at Vox Nova a few weeks back when he announced that Louisiana would not be taking a portion of the federal stimulus funding earmarked for increased unemployment benefits (since this announcement, the governors of several other states have made similar statements). I don’t think the actions of the governors in this regard are particularly noble (you’ll note that they didn’t reject all stimulus funds, but only this one little bit). Nevertheless, I thought some of the criticism of Jindal on this score was misdirected. The money rejected by Jindal doesn’t just disappear. The money is still there, and can still be used to provide relief in other states. Louisiana’s unemployment rate is currently significantly below the national average, and if Louisiana’s rejection means that more funds are freed up for harder hit areas, that would seem to be all to the good.
Similarly, Mother Jones reported on Tuesday that cities in Los Angeles County were selling the stimulus funds earmarked for their cities, in some cases at a significant discount. It seems that, out of some misguided sense of fairness, the government had allocated some funds to every city in the area, regardless of whether a particularly municipality would even be able to use the funds. After the story broke, the Los Angeles County MTA canceled the swaps.
In both cases, what we have is the belief that stimulus funding is best allocated based on political clout and/or the whims of a central authority, rather than having local self-evaluations of need play a role.
On Monday, I listened to President Obama’s prime time press conference, which was focused on the President’s economic plans. When asked how we would know if the stimulus package due to be voted on today was successful, Obama stated that his “initial measure of success is creating or saving 4 million jobs.” The inclusion of the words “or saving” is, of course, a fairly big hedge, since the only way to really say for certain that his plan hasn’t saved 4 million jobs is if things get so bad that there are less than four million people working in this country. Still, I take the President at his word that saving jobs is a priority for him, and motivates his strong support for the stimulus package.
The irony is that even as Obama was speaking, thousands of small businesses in the U.S. were bracing for the effects of a new law that may very well put an entire industry out of business. As you may dimly recall, last year there was a scare involving lead paint in some toys from China. In response, Congress hastily passed the Consumer Product Safety Improvement Act, which required any manufacturer of children’s products to certify, starting on February 10, 2009, that there products did not contain a significant amount of lead.
It sounded like one of those common sense pieces of legislation that no sensible person could oppose. And, in fact, passage of the bill was nearly unanimous. The problem, however, is that the required certification is prohibitively expensive for most small businesses. So whatever the good intentions behind the law, its results are potentially devastating.
Due to public outcry, the Consumer Product Safety Commission agreed to stay enforcement of certain aspects of the new law for one year. Nevertheless, on February 9th the CPSC published guidelines telling thrift stores and other sellers of used goods that they could be held liable for selling uncertified books published prior to 1985, as well as books with metal or plastic components. The results have been far from pretty:
My daughter works in a used bookstore. TODAY they pulled all the books from the children’s section that had any kind of metal or plastic or toy-like attachment, spiral bindings, balls or things attached, board books, anything that might be targeted under this law, and they very quietly trashed them all. I say “very quietly” because the bookstore had a meeting with employees and told them to be careful not to start a panic. If anyone asked what they were doing they were told to say that they were “rearranging their inventory.” No one was allowed to tell anyone about the new law, and no one was allowed to take any of the doomed-for-destruction books home or give them away.
I just came back from my local thrift store with tears in my eyes! I watched as boxes and boxes of children’s books were thrown into the garbage! Today was the deadline and I just can’t believe it! Every book they had on the shelves prior to 1985 was destroyed! I managed to grab a 1967 edition of “The Outsiders” from the top of the box, but so many!
The lesson here, I think, is that laws often have serious and negative unintended consequences, and this danger only increases when a bill is passed in a hurry or out of a perceived necessity to “do something” about a given problem. It’s a lesson, I fear, that we will have to learn again and again over the coming years.
From the New York Times:
“All you need to do is grant visas to two million Indians, Chinese and Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper. “We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate — no Indian bank today has more than 2 percent nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans.”
Alan Greenspan floated the same idea last summer. Congress, however, seems to have other ideas:
the U.S. Senate unfortunately voted on Feb. 6 to restrict banks and other financial institutions that receive taxpayer bailout money from hiring high-skilled immigrants on temporary work permits known as H-1B visas.
One of the lesser known aspects of the Madoff swindle is that it has left America’s number one abortion provided in dire financial straights:
Another nonprofit organization has found itself a victim of Bernie Madoff’s alleged $50 billion Ponzi scheme. A one-two punch of fundraising woes sparked by the economic crisis and the unfolding Madoff scandal have put The Planned Parenthood Federation of America on its heels, prompting a 20% layoff of staff , according to a report published on Crain’s New York’s website.
Given the vital role that organizations like Planned Parenthood play in the progressive imagination, it should come as no surprise that congressional Democrats have responded to this crisis by proposing a bailout:
Now comes the latest revelation about the congressional Democrats’ “stimulus” plan: it includes taxpayer funding for contraceptives and the abortion industry. Specifically, a provision in the legislation clears the way for expanded federal funding of contraceptives through Medicaid for those who aren’t even poor.
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