The Flinchum File

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HO HO HO . . . NOT

12/26/2014

Congressmen should never be allowed to decorate a Christmas tree, as they would hang or hide the most ugly and most dangerous ornaments both on and under the poor tree!

As a minor example, the latest budget bill repealed limits on the number of hours a commercial trucker could work.  As someone who spends way too much time on interstate highways, I am not happy that the guys driving these huge monster trucks will still be sleepy.  It was repealed before it even took effect and is an ugly holiday ornament indeed.

More importantly, following the global financial collapse in 2008/9, it was obvious that collapse was made larger and more dangerous because of the lack of transparency and the unsupervised nature of derivatives.  Congress tried to contain the problem, but the big money-center banks hired every lobbyist on Connecticut Avenue to combat Congress.  Four years after passage, the Treasury Department has still not be able to even define the problem, due to the intensive and expensive lobbying.  No, nobody is saying that the money-center banks want to destroy America.  They just want to maximize their personal incentive plans.

Alan Greenspan, ever the libertarian, believed corporations would never do anything that threatened their own existence.  He recalled a bygone era when employees mirrored the loyalty of their employers.  Unfortunately, that two-way loyalty is very bygone, and the loyalty of employees now lies with their incentive plan, not the employer.  “If the company craters, I’ll just go somewhere else and take my money with me.”

Thus, another ugly and dangerous ornament on the 2014 budget Christmas tree is a repeal of the limits on derivatives, so we can avoid knowing which banks are exposed to which risks.  It is like lending money your next-door neighbor without knowing anything about him.

However, in the shadow of that poor mistreated Christmas tree, there is always more to hide.  Congress is trying to require that the Congressional Budget Office (CBO) use “dynamic scoring.”  The CBO has earned a good reputation for non-partisan estimates of the costs of legislation.  Congress now wants to require CBO to use Supply-side economics to make those estimates.  To economists, that is like Congress telling Presbyterians, Catholics and Jews that they all have to be Baptists (no disrespect to any religion intended).

There is a time and a place that Supply-side economics works better than Austrian or  Keynesian economics, but it is not always and not everywhere.  Dictating “religion” to economists is just stupid and counter-productive!  Doing unpopular things under the cloak of the holiday season is just rotten, even if predictable.  I can’t hardly wait to see what is done under the cloak of the 2015 holiday season!

Happy Holidays to Congressmen has a very different meaning . . . it is a time for skullduggery!

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