Comey Gives the New York Times a Black Eye While Selective Leakers Leave the People in the Dark

The (abridged) exchange with Senator Risch (R-Idaho) proceeded as follows:

RISCH: You talked with us shortly after February 14th, when the New York Times wrote an article that suggested that the Trump campaign was colluding with the Russians. Do you remember reading that article when it first came out?

COMEY: I do.

RISCH:  After that, you sought out both Republican and Democrat senators to tell them that, hey, I don't know where this is coming from, but this is not the case. This is not factual (my italics). Do you recall that?

COMEY: Yes.

RISCH: So, the American people can understand this, that report by the New York Times was not true. Is that a fair statement?

COMEY: In the main, it was not true. And again, all of you know this (my italics). Maybe the American people don't.

Most damning in this exchange is Comey’s cynical “you know but the American people don’t.” Where is the outrage that the media collusion narrative was based on a falsehood of which U.S. senators were aware? The Times has issued no retraction and lamely states that “the immediate sources could not be reached” but “they have indicated that they believed the account was solid.” The anonymous sources can believe what they want, but the FBI head thinks otherwise.

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Putin Counterattacks: Russian Turncoats Working For The CIA Hacked The Kremlin

In the course of its investigation, the FSB discovered that a group of Russian hackers calling themselves “Shaltai-Boltai” had hacked the personal accounts of the highest officials of the Russian government, the presidential administration, and the ministry of defense. The FSB has concluded that the Shaltai-Boltai” attacks were coordinated by Mikhailov and carried out by super-hacker, Dokuchaev.
Note that Putin’s charges are more dramatic than those of the U.S. Democratic and media establishment:  American spies hacked the entire Russian state, not just the DNC or John Podesta as the Democrats charge Russia. Putin is more of a victim than Hillary Clinton, according to this line of reasoning.
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Trump’s Manafort’s Troubling Ukraine Ties Routine for DC’s K Street Bottom Feeders

The brilliance of the mainstream media’s attack on small-fry Manafort is that it diverts attention from the potential granddaddy of corruption schemes. The Clinton Foundation, if there is ever a real investigation, may be shown to have eliminated the K Street middleman. By contributing directly to the Clinton machine, a foreign government or a corrupt foreign oligarch can gain access directly to the heart of government. Just think of the possibilities: Today the State Department, tomorrow the presidency of the United States.

Read more at: http://www.nationalreview.com/article/439065/manafort-ukraine-democrats-clinton


go to National Review

The New York Times Exposes Death Panels

Sarah Palin was widely ridiculed for her use of “death panels” to describe the inevitable rationing of medical care under Obama Care. As Palin famously declared in August 2009:

“The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama's 'death panel' so his bureaucrats can decide, based on a subjective judgment of their 'level of productivity in society,' whether they are worthy of health care. Such a system is downright evil."

An outraged Politifact (a Pulitzer Prize winner, no less) pushed back.

“There is no panel in any version of the health care bills in Congress that judges a person's "level of productivity in society" to determine whether they are ‘worthy’ of health care.”
Politifact seems not to have understood that there was no need to formalize death panels under Obama Care. They will automatically come into play when bureaucratic intervention, price controls, and complicated administrative rules create shortages of surgeons, hospital rooms, imaging equipment, and medication.  With shortages that bureaucracies prevent from being eliminated by market forces, we will automatically have “death panels” or even worse procedures for allocating scarce medical resources.

Indeed, a New York Times’s exhaustive investigation reports that shortages of all sorts of drugs — anesthetics, painkillers, antibiotics, cancer treatments — have become the “new normal” in American medicine. The American Society of Health-System Pharmacists currently lists “inadequate supplies” of more than 150 drugs and therapeutics.” Per the NYT, with such shortages: “choices are …. made in ad hoc ways… resulting in contradictory conclusions, murky ethical reasoning and medically questionable practices.”

The Times delves into the various types of administrative panels that decide which patients receive life-saving medications and which do not. The Children’s Oncology Group’s guidelines (the largest international group of children’s cancer researchers) ration drugs based on added years of life, curability of a child’s cancer, improving survival chances, and participation in clinical research.  The group also advises that allocation rules be made public. The child oncologists are not happy with their foray into rationing: “We’ve been forced into what we think is a highly unethical corner.”

With widespread drug shortages, rationing rules are being applied generally in hospitals and medical centers to decide who gets drugs. The rationing panels are comprised of  physicians, ethicists, hospital administrators, insurance companies, or drug manufacturers and usually use indicators of productivity, worthiness, and even weight (obese patients require more of the drug). In many hospitals, patients are not told that their drug regimen has been changed due to shortages.

The Times seems uninterested in the causes of drug shortages. After all, if the medication is not a “shortage drug” no panel is required to determine its allocation among patients. In its 2,500 word investigative article, the Times authors devote one sentence to the reasons for the shortages, which (they say) range “from manufacturing problems to federal safety crackdowns, to drug makers abandoning low-profit products.”

There is no discussion of measures to create balances of supply and demand – perhaps by making it worthwhile for the manufacturer to produce at a profit. Instead, the focus is on administrative measures to decide who will get the medication. Why does the Times not investigate why, for example, aminocaproic acid, cheap, widely and safely used for decades in open-heart surgery, has become a shortage drug?  Has the increased involvement of the government played a role? It seems that this is a legitimate question, only one the Times ducks.

Of the three reasons given for shortages, we cannot determine the extent to which Obama Care’s bureaucratic intervention in medicine has caused “production problems,” or “safety crackdowns.” Of course, companies will abandon products due to low (or nonexistent) profit margins. But this was the original objection to Obama Care: It would dictate low drug prices, which would not be permitted to rise even with shortages. It seems that laws of economics are supposed to be suspended under Obama Care.

We do not have shortages of cars, electricity, home electronics, airline seats, and so on. Admittedly, medicine is complicated, but it is foolhardy to think that basic economic laws do not apply.

Putin Blinked. Nonsense From Thomas Friedman

New York Times Columnist Thomas Friedman writes that Putin has decided to behave himself due to the interrelatedness of the world economy and the threat of sanctions. His implication is that Obama's "slow and steady" worked. I wish Mr. Friedman would check his facts first. He claims Putin decided to "allow" the Ukrainian election, that he has withdrawn troops, and that he has accepted the results of the Ukraine election.  All false.

go to Forbes.com

Tunnelling Wealth To Vladimir Putin

The writers of the New York Times feature seem puzzled why Putin would run the risk of accumulating a secret fortune that would make him among the richest men in the world. After all, he has government planes, palaces, limousines, and every other luxury at his disposal (including $80 million in watches). Even to ask this question reveals a lack of understanding of Putin’s Russia. Putin and his inner circle live in fear of a “Russian Spring” that could unseat them when they least expect it. They cannot place their fortunes in Russia with its lack of rule of law. A deposed Putin living in Switzerland would require a king’s retinue of guards, cronies, and servants. He would need to pay huge sums of protection money. He would not be caught, like his deceased rival, Boris Berezovsky, depressed in his English manor, down to his last $10 million.

go to Daily Caller

Stiglitz's Brainchild: Trust Government To Restore Trust!

Economists divide into those who theorize about the economy and those who use data to understand how it works. Theorist Joseph Stiglitz has impressive credentials – a Nobel Prize, appointments at the best universities and to top positions in government and international organizations. He counts, along with Paul Krugman, as the most prominent economist of the American left. 

Stiglitz’s tone-deaf article for the New York Times (In No One We Trust) argues that private enterprise and the profit motive have destroyed trust without which the economy and society cannot function. It is up to government to restore trust and to make us all better people in the process.

The timing of Stiglitz’s “government is the cure” message, amidst the catastrophic roll-out of ObamaCare, confirms the ivory-tower detachment of Stiglitz and his ilk. Just as Obama’s administrators are turning the lives of Americans topsy-turvy with contradictory, improvised health-care regulations, Stiglitz wants state planners and bureaucrats to expand their control of our lives all the way down to enforcing their version of business ethics.

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Why Doesn't The New York Times Expose Carlos Slim?

The New York Times, in its persistent fight for the poor and downtrodden, exposes rapacious lenders who foist unaffordable mortgages on naïve families, shines light on polluters, climate change deniers, and oil spillers, spins pitiful tales of hungry children and uninsured families denied medical care, documents the plight of illegal aliens separated from families and exploited by evil employers, exposes Big Oil and Big Pharma's unwillingness to pay their 'fair share,' and even discloses the misdeeds of non-unionized Walmart in Mexico. After all, the Times must protect Mexican consumers from low prices.

The Times is also an arbiter of what is in the public interest. From the Iran cyber attacks to WikiLeaks, the Times decides which national secrets to expose, even if it puts American allies at risk. No wonder, the "Grey Lady" is regarded as America's newspaper of record.

Although the Times declares itself beyond reproach in the era of Murdoch klatsch journalism, it exempts its second largest shareholder (and lender of last resort), Mexico's Carlos Slim, from its motto: "printing all the news that's fit to print."


go to realclearmarkets.com

Sorry New York Times, Tax Flight of the Rich Is Not a Myth

James B. Stewart writes “Common Sense” for the Business Day section of The New York Times. A Pulitzer prize-winning journalist and a professor of journalism at Columbia, Stewart’s The Myth of the Rich Who Flee From Taxes is either amateurish economics or deliberate distortion to pursue a political agenda.

Stewart writes to dispel, as a myth not worth thinking about, the notion that high marginal tax rates in one municipality, state, or a country push the wealthy to move to lower-tax locations. He assures his readers that although the notion “on its face seems to make sense…it is not the case. It turns out that a large majority of people move for far more compelling reasons, like jobs, the cost of housing, family ties or a warmer climate.”  (Stewart: Stop the “Strawmanism.” No one claims tax rates are the primary determinant of where we live).


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The Liberal Left's Dirty Little Secret: The Middle Class and Poor Pay For the Entitlement State

Europe’s more than half century experience shows that, no matter hard you squeeze them, the rich cannot pay for a big government that guarantees all its citizens “positive rights” to income, employment, health, and retirement. Such an entitlement state – some call it a nanny state -- is funded primarily by repressive taxes on the middle class and the working poor. This conclusion is based on hard statistical facts that neither the right nor left dispute. America’s Left has kept this fact under wraps and out of sight of voters. It should have been the focus of the 2012 Republican campaign, but it was not.

Barack Obama has been busy creating and expanding an American entitlement state that he promises will be paid for by the rich. The middle class and poor need not worry about tax increases.  For the time being, Obama can rely on lenders (and the Fed) to finance the annual $850 deficits projected under the most likely CBO scenario. But the day of reckoning will come.  At some point, the “bond vigilantes” will refuse to finance the deficit at sustainable rates, and the government will be forced to cut entitlement spending or vastly raise taxes.  When that time comes, then ex-President Obama expects the entitlement mentality to be so deeply ingrained that the middle class and working poor will accept their higher taxes with little protest.

If we continue down the road to Obama’s Big Government, everyone watch their wallets. The taxman commeth, big time! Judging from Europe’s experience, we must dramatically raise income taxes on the middle class, triple social security taxes, introduce a 20 percent federal sales tax, and raise the gasoline tax by $4.00.  These taxes are all regressive, which means they fall most heavily first on the poor and then on the middle class.

If you do not believe me, an influential member of the media elite (from the New York Times editorial board, no less), let this secret slip in a remarkably candid admission. (Note his article appeared after the election):

 



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The Giant Sucking Sound Is Hostess Jobs Moving to Mexico (And Media Give Democrat Private Equity a Pass)

November 21, 2012 was a dark day for us Gen X-ers, who grew up with calorie-rich Twinkies and Ding Dongs in our school lunch boxes. (Nowadays, they would probably be confiscated by the food police, but that is now not then). After a failed mediation, Hostess Brands announced last Tuesday it would proceed with liquidation after 82 years of operations. Its various brands – among them, Wonder Bread, Twinkies, Dolly Madison, and Home Pride – go on the auction block as Hostess’s competitors, such as Flowers Foods, ConAgra, and Mexico’s El Grupo Bimbo, are poised to pick up Hostess’s iconic Twinkies, Ding Dongs, Ho Hos, and Dolly Madison brands.

A successful bid from Grupo Bimbo, the world’s largest baker, means Twinkies labeled “Hecho en Mexico” – the ultimate insult to the American baker and delivery man. News reports claim this result is likely. Twinkies can return as a highly profitable Mexican expat free from U.S. tariff-inflated sugar prices and unions.

The liquidation leaves Hostess’s 18,500  workers, most members of the Teamsters or bakery workers union, out in the cold. They are probably asking: President Obama: Where are you when Twinkies and Ring Ding Juniors need saving rather than Detroit?

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Obama's Own "Let Detroit Go Bankrupt" Destroys Foundation of Campaign

Mitt Romney’s factually-accurate but mischievous Jeep ad baited the Obama campaign into admitting that the charge against Romney (“Let Detroit Go Bankrupt”) on which its campaign is based is false.

Romney’s TV spot: “Obama took GM and Chrysler into bankruptcy, and sold Chrysler to Italians who are going to build Jeeps in China,” is 100% factually accurate. That is its beauty.

Yes, it is true that the Obama administration took GM and Chrysler through Chapter 11bankruptcy. GM and Chrysler shares became worthless and their creditors lost most of their investments. Chrysler was indeed sold to Italy’s Fiat. Chrysler’s Jeep has indeed announced that it intends to produce Jeeps in China.

The Jeep ad brought forth a furious counter attack by Obama operatives, media allies, and self-appointed “independent” fact checkers. In its cry and fury, the Obama juggernaut made a fatal mistake: They admitted that Obama “let Detroit go bankrupt,” as Romney proposed. Staunch Obama supporter, the LA Times, could not bring itself to utter the dreadful word: “Chapter 11.” It chose instead to call what happened at GM and Chrysler “brief bankruptcy restructurings.”

A self-declared (but really democrat) independent fact checker really stepped in it with its dismissal of the nefarious and outrageous (but true) Romney ad:
“It’s also misleading to say ‘Obama took GM and Chrysler into bankruptcy’ without mentioning that Romney, too, advocated a bankruptcy plan. In fact, Romney wrote a 2008 op-ed that said: ‘A managed bankruptcy may be the only path to the fundamental restructuring the industry needs’.” At last, we have the two candidates agreeing on a truly important issue. (FactCheck.org: I guess you would love to take that back).

Note the irony: After three years of “I saved the auto industry and Romney wanted Detroit to go bankrupt” in his stump speeches, the Obama team is using Romney to defend the Detroit bankruptcies Obama orchestrated. You mean Bain capitalist Romney did not want to decimate both Detroit and the Ohio auto industry as you have been telling us?  So Obama “saved” millions of auto jobs by following Romney’s advice?

But wait, the LA Times is ready with the standard Obama comeback:  Obama forced GM and Chrysler through a government imposed Chapter 11 because “other sources of financing became unavailable during the recession.”  Not true at all. The treasury could have provided a neutral bankruptcy court with the small amount of creditor-in-possession financing at no taxpayer risk needed to reorganize GM and Chrysler at a small fraction of the $80 billion it actually spent.  With its recognized brand, billion dollar revenues, and inflated costs begging to be pared, GM would have attracted bidders out of the Gazoo, even in 2009.

When cornered with this truth, Obama supporters will play the blame-Bush-game: “Well Bush provided government funds to keep GM and Chrysler running as he passed the baton to Obama. Yes, but then Obama should say: “Bush saved Detroit, not me.” Strange, but I have yet to hear these words.
Although the two candidates are on the same “let Detroit go bankrupt” page, their approaches could not have been more different. Obama used government pressure and blackmail to reward his UAW allies. He knew that the UAW wage and pension contracts could not survive the regular bankruptcy proceeding that businessman Romney wanted. Obama is now getting his payback. Organized labor is his biggest contributor and the organizer of the fabled Obama “ground game.”

Main Stream Media: Where were your fact checkers when Obama was distorting Romney’s “let Detroit go bankrupt”? You seem to notice only when Mitt finally played hardball and reversed the tables.

Where is the Obama apology:  “American voters: Forget what I said earlier. Both Mitt and I agree to ‘Let Detroit Go Bankrupt’.”

Paul’s recommendation: Read Good Intentions, By Bob Zeidman, before voting.

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There You Go Again: New York Times Trying to Save Obama in Ohio

 In its GOP Turns Fire on Obama Pillar, The Auto Bailout, the New York Times engages in a blatant distortion to prop up Obama’s waning fortunes in Ohio. 

The Times rehashes a November 18, 2008 Romney editorial entitled Let Detroit Go Bankrupt as follows:

“Mr. Romney wrote an Op-Ed article in the New York Times — given the title by the newspaper “Let Detroit Go Bankrupt.’’ In the piece Mr. Romney wrote that in the event of a bailout, “You can kiss the American automotive industry goodbye.”

Notice that the Times admits it chose the misleading headline (“Let Detroit Go Bankrupt”), which served as campaign fodder for Obama for the next three years.

Anyone who bothers to read the Romney piece knows he is arguing against a federal bail out (not bankruptcy) of GM and Chrysler. A bailout would leave both unable to compete, and, indeed, you could “kiss the American automotive industry good by.”

Instead, Romney advocated a court-managed Chapter 11 bankruptcy to realign GM and Chrysler’s costs with competitors to save GM and Chrysler.  The Obama administration agreed. Obama’s car czar pushed GM and Chrysler through Chapter 11 bankruptcy proceedings. Chrysler was, in effect, sold to Fiat.  The bankrupt “old” GM’s shares became worthless, and its assets were transferred to a “new” GM owned primarily by the unions and the federal government.

The Times somehow forgot to tell its readers that Obama agreed with Romney to “let Detroit go bankrupt.”

Romney wanted a regular bankruptcy preceding to put in place  “new labor (UAW) agreements to align pay and benefits to match those of workers at competitors.” Alarmed by his UAW allies, Obama rushed to strong arm through a political bankruptcy at taxpayer expense that shortchanged bond holders, preserved union contracts and gold-plated pensions, and made the federal government the largest single shareholder.

Do not take my word: The Washington Post’s Fact Check: Letting Detroit go bankrupt rejects Obama’s references to Romney’s  wanting Detroit to go “bankrupt.”  I quote:

“This statement is drawn from a headline — ‘Let Detroit Go Bankrupt’ (chosen by the Times)— on an opinion article written by Romney for New York Times. But he did not say that in the article…Although ‘bankrupt’ often conjures up images of liquidation, Romney called for a ‘managed bankruptcy.’ This is a process in which the company uses the bankruptcy code to discharge its debts, but emerges from the process a leaner, less leveraged company.”

Confronted with this truth, Obama’s supporters can only claim: “But there was no money for a regular bankruptcy.” Yes, there was. If the federal government could throw $80 billion at the GM-Chrysler bankruptcies, it could have put up the small amount of creditor-in-possession funds required for a regular bankruptcy.

Ohio remember:  Obama’s political bankruptcy of GM did not rescue jobs. It rescued union pay and benefits.

published in forbes.com 

Krugman’s Malarkey: “Death by Ideology”

Paul Krugman argues in his Death by Ideology  that “lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths of Americans each year.” Romney and Ryan, he claims, “want to repeal Obama care and slash funding for Medicaid — actions that would take insurance away from some 45 million nonelderly Americans, causing thousands of people to suffer premature death.” Moreover, any plan to replace Medicare by vouchers “would deprive many seniors of adequate coverage, too, leading to still more unnecessary mortality.” And what if the amount of money in a “voucher care” program were not enough to buy a decent policy? Krugman lectures that “going to the emergency room when you’re very sick is no substitute for regular care, especially if you have chronic health problems.”

It would be good if Krugman did a little gathering of facts before he writes.  If he had read my Krugman’s Sick Numbers, he would know that there are virtually no uninsured poor, that most of the uninsured are relatively young and can afford health insurance but choose not to. For them, health insurance is simply not a good deal. He seems not to know that those who substitute the emergency room for a regular physician are primarily those on the government Medicaid program. They are insured but few medical care providers want the measly fees the government offers them.

As an economist, Krugman should know that the real question is not whether there would be enough money in a voucher program “to buy a decent program.” Instead, he should ask, based on developing experience, whether government health insurance programs offer providers enough money so that they do not have to treat the government insured at a loss? If this is the case, the poor will not be able to get a doctor. Judging from the emergency room visit statistics, that is exactly what is happening.

Could it be that government insurance is “death of ideology?”

Why The Shock That Obama Lost?

The Mainstream media and the Democrat Left are traumatized by Obama`s clear loss of the first presidential debate in Denver. Obama campaign operatives blame Jim Lehrer for letting the debate get out of hand.  Others use the excuse  that Obama`s famous debating skills are rusty. Both sides seem to agree that Obama played defense to protect the lead the polls are giving him. The most zealous Obama fans pulled their hair and asked “Where was Obama tonight?”

Being in Berlin, I watched the debates this morning on YouTube, immediately after reading the pundit consensus that Obama had an off night and had lost the debate. After watching the entire debate, my take was quite different. I saw the regular campaign-trail and White-House-press-conference Obama and a slightly energized Romney, not much different from his better primary debates. I would have judged the debates a tie, putting myself in the shoes of the average viewer. Obama made his usual points. Romney made his, although in a better prepared manner. Both Obama and Romney performed as I expected, except that Romney seemed more energized and comfortable.

If my impression that both performed up to capacity is on the mark, why the media and Democrat shell shock about Obama`s disastrous performance?



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New York Times Downplays U.S. Decline

In my World Economists Confirm America's Decline Under Obama,  I stressed the headline that the World Economic forum’s Global Competitiveness Index lowered the United States’ world ranking from first to fifth during the first three years of Obama’s term.

Unbeknownst to me, the World Economic Forum published its 2012 ranking the next day. With the U.S. election just two months off, the true headline should have been: “U.S. Decline Continues as We Fall from First to Seventh Under Obama.”

The New York Times ignored this headline by emphasizing the growing competitiveness gap within Europe. In its Competitiveness Gap Widening in Europe, the venerable Times gives one brief mention to the further collapse of U.S. competitiveness hidden in the middle of the article:

“Switzerland, which is not a part of the European Union, takes top place in the global table, with Singapore second, the United States occupying 7th position — down two places from last year — and Canada at 14th. China, in 29th place, is rated the most competitive among large emerging markets.”

And the Managing Editor of the Times denies any form of media bias in her newspaper.

Another Media Gaffe: Romney in Israel

 

Mitt Romney has been skewered by the mainstream media for a statement about Israel and the Palestinian Authority that is accepted as true by top economic historians and anyone with a little common sense. Perhaps Romney should have known better than to make an intellectual point before reporters, whose attention span and education are in short supply, to say the least.

Romney began his to-be-skewered remarks in Jerusalem with a statement of fact:

“And as you come here and you see the GDP per capita, for instance, in Israel, which is about $21,000, and you compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice a dramatic, stark difference in economic vitality.” (He overstated the Palestinian figure, pointed out one jubilant critic, but the point remains the same).

Romney’s “gaffe” was to use Harvard economic historian, David Landes’s The Wealth and Poverty of Nations to explain the differences in “economic vitality” between Israel and its Arab neighbors he saw with his own eyes:  

“If you could learn anything from the economic history of the world it’s this: culture makes all the difference. Culture makes all the difference.”

The Press buzzed with excitement: Did Romney actually say that Israel is successful and the Palestinian Authority is not because of cultural differences?  What an insult! Such a racist and bigot is not fit to be President! What an opportunity to build on the narrative that Romney is gaffe prone!

go to forbes.com

Should the New York Times Investigate Wal-Mart or Carlos Slim?

The  New York Times’s Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle suggests that Wal-Mart violated the Foreign Corrupt Practices Act. The smoking gun: Seven years ago, Wal-Mart de Mexico hired two outside lawyers for $8.5 million to “facilitate” store permits. The lawyers were effective:  “Legal and bureaucratic obstacles melted away after payments were made to minor officials who could thwart Wal-Mart’s growth.” Wal-Mart executives, the  article charges, did not take appropriate action after an internal investigation.

No believer in free enterprise should excuse or make light of violations of laws by Wal-Mart or any other private company. We hope that Wal-Mart moves forcefully to put this business behind it.

In its anti-Wal-Mart fervor, the Times inflates the $8.5 million into an “orchestrated campaign of bribery to win market dominance” that erected Wal-Marts on “virtually every corner of the country.”  No mention of the possibility – if not  probability – that local officials could not pass up a once in a lifetime opportunity to extort Wal-Mart.  A Wal-Mart success story explained by its “everyday low prices”  does not fit the Times’ political agenda. Greasing the palms of local officials with a few dollars is a more convenient explanation.

A few blocks away from 620 Eighth Avenue, Carlos Slim, the Times’ second largest shareholder behind the Sulzbergers, oversees his sprawling Telmex and Latin American telecommunications empires from atop Rockefeller Center. Slim is a welcome guest at the most exclusive of Manhattan cocktail parties.  Wal-Mart’s hillbilly executives from Bentonville, Arkansas would simply not fit in.

go to forbes.com

Student With Federal Loans: Uncle Sam Can Take 15%!

The New York Times launched a new distraction in its two and a half page expose of the student loan racket entitled A Generation Hobbled by the Soaring Cost of College. The Times deplores that college students and their parents have been duped into taking on debt like naïve home buyers, that tightfisted Republican legislatures are to blame, and that we could have avoided the problem with another stimulus. The Times does not mention that student loans are not protected by personal bankruptcy and that the federal government can garnish 15% of scofflaw wages. The real villain is Uncle Sam!

 

In typical Times fashion, the story begins with a victim, who has been taken the the cleaners:

Kelsey Griffith graduates on Sunday from Ohio Northern University. To start paying off her $120,000 in student debt, she is already working two restaurant jobs and will soon give up her apartment here to live with her parents. Her mother, who co-signed on the loans, is taking out a life insurance policy on her daughter.  “If anything ever happened, God forbid, that is my debt also,” said Ms. Griffith’s mother, Marlene Griffith. “As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” said Ms. Griffith, a marketing major. “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”

Who are the villains who duped the helpless Griffith, her parents, and others like her into taking on this unreasonable debt burden? For-profit schools, private schools with slick brochures promising ready-made financing, anti-tax republicans, and rising tuition in state schools, where Republican legislatures have cut back on higher education funding:

There is an ideological and political tug of war as well. State Representative John Patrick Carney, a Democrat, said if legislators were serious about financing higher education they could find a way, like eliminating tax breaks for corporations. He noted that even as funds for higher education were being reduced, Mr. Kasich and the Republican-controlled Legislature eliminated the state’s estate tax, which will cost the state an estimated $72 million a year.

 The subliminal message: If only Obama had gotten a second stimulus, the states would be awash in money.

The Times let slip that “federal mandates and court orders have compelled lawmakers to spend more money on Medicaid and primary education, too.”

Never one to bad mouth a federal handout program, the Times rushes to assure its readers that a wholesale default “would be unlikely to ripple through the economy with the same devastating impact as the mortgage crash. Though now larger than credit card and other consumer debt, the student loan balance remains smaller than the mortgage market, and most student loans are issued by the federal government, meaning banks wouldn’t be affected as much.”

In other words: If students don’t repay, the taxpayer will, but who worries about the taxpayer?

The Times fails to identify the real Simon Legree of the student loan program – the federal government itself. According to the Debt Collection Improvement Act (passed under Bill Clinton):

The US Department of Education (ED) is authorized to garnish 15 % percent of the erstwhile student's disposable income in lieu of unpaid student loans. The organization, that employs the student after graduating/dropping out of school, is expected to comply with rules regarding garnishment even in the event of filing bankruptcy.

As Congress debates how to pay for continued subsidization of interest rates on college loans, the Feds’ power to take 15 percent goes unnoticed.

Dr. Gregory's latest book can be found at Amazon.com.

Questioning China's Economic Model: One Spark?

The New York Times’ As Growth Slows, China’s Economic Model is Questioned sets a tone in marked contrast with its enthusiastic accounts of China’s prowess. One of its most respected columnists, Thomas Friedman, has been singing the praises of  Chinese infrastructure for years. In New York City, Friedman sees potholes. In China, gleaming highways. Friedman never met a cement mixer he does not like. China has plenty. We have too few because the Republicans won’t authorize an infrastructure bank. We have political stalemate, while China is run by wise technocrats dressed in muted business suits who decide what is best for the country and are not hobbled by the rule of law, property rights, and other small things that get in the way of progress.

The Times piece raises an uncomfortable question for those who regard the Chinese model as the way of the future. Could it be that China is a house of cards, ripped apart by political infighting over political power and spoils, that is kept alive only by embattled  private enterprise?  Could it be that the polite men in dark business suits, who are feted in Washington as our equals, rob state enterprises for their personal benefit, suppress dissent because they know that one spark can destroy their party monopoly, and compete among themselves to see who can waste public savings the fastest by pouring concrete faster than their regional competitors.

go to forbes.com

Dr. Gregory's latest book can be found at Amazon.com.