The Problem of Crony Capitalism Today

Image result for capitalismThe following is a speech given by Bill Walton to the Center for Constructive Alternatives at Hillsdale College on Tuesday, Nov. 10, 2015: 

I have spent most of my career on Wall Street and in business. I was CEO of a publicly traded NYSE private equity firm for about 14 years from 1997 to 2010. We were highly regulated by the SEC as an Investment Company and headquartered just three blocks from the White House. I also served on the Board of the Financial Services Roundtable whose members were the 100 largest financial service companies in America. So I’ve been in the arena and have had a front row to seat to the business of government in Washington.

As I prepared this talk, I started out not wanting to tell a story of good and evil with the bad guys being; greedy capitalist, intrusive and coercive regulators, venal politician, K Street lobbyists versus “the rest of us.” You know, the talk radio version of cronyism.

I didn’t think it was that simple. But after digging into this issue, I’m beginning to think it is. We have a massive and growing problem in America.

  • It’s a moral issue
  • It explains why economic growth is anemic
  • And it’s bipartisan

The problem is not simply “crony capitalism,” the problem is that the size and scope of the federal government is such that it’s impossible to know where business starts and government ends.

 

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State Dept. Acknowledges Security In Libya Has Been A Struggle Since Hillary’s Ill-Fated Intervention

Image result for security in libyaState Department spokesman John Kirby said that Libya “has struggled” to maintain a secure country since Hillary Clinton pushed for intervention to overthrow Muammar Gaddafi.

During Friday’s State Department briefing, Kirby claimed, “There’s a concerted effort by the international community to do what they can, to do what we must to try to get better security and stability there in Libya.”

The reporter asked Kirby, “What is your assessment did the security situation in Libya get better or worse after the intervention in 2011?”

Kirby responded, “After the intervention in 2011? I think we’ve all seen that Libya has struggled since 2011 but what I can tell you there is concerted effort by the United States and by many in the international community and we’re grateful to Italy for hosting this for hosting this conference early next week.”

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P.J. O’Rourke on the 2016 Presidential election: ‘You’re screwed’

Image result for 2016 presidential candidatesFrom P.J. O’Rourke in Stansberry Digest:

If he or she gets elected, which candidate would have what financial effect on you?

I can answer that question in three sentences: If any of the candidates who are most likely to be elected get elected,you’re screwed. However, there are also some candidates who would keep you from being screwed if they got elected. But they aren’t going to get elected, so you’re screwed.

Who are these jacklegs, highbinders, wire-pullers, mountebanks, swellheads, buncombe spigots, boodle artists, four-flushers and animated spittoons offering themselves as worthy of America’s highest office?

Do they take us voters for fools? Of course they do. But are they also deluded? Are they also insane? Are they receiving radio broadcasts on their teeth fillings telling them they’d be good presidents?

Clinton, Bush, Fiorina, Sanders, Rubio, Cruz, Kasich, Huckabee, Christie, Santorum, O’Malley, Jindal, Graham, Pataki, Chafee, and Trump.

That’s not a list of presidential candidates. That’s the worst law firm in the world. That’s a law firm that couldn’t get Caitlyn Jenner off on a charge of Bruce Jenner identity theft.

Has the office of the presidency diminished in stature until it attracts only the leprechauns of public life? Or have our politicians shrunk until none of them can pass the carnival test – “You Must Be Taller Than the Clown to Ride the White House Tilt-A-Whirl”?

Indeed, I tremble for my country when I reflect that – after all is said and done and the smoke has cleared – the two candidates for president are probably still going to be Clinton and Bush.

Members of the electorate will go into the ballot booth, see those two names, and think to themselves, “Gosh, I’m getting forgetful. I did this already”… and leave without marking the ballot. Voter turnout will be 6%.

The shuttle from the local old-age home will send a few senile Republicans to the polls. A Democratic National Committee bus will collect some derelicts from skid row. And we will have the first president of the United States elected by a franchise limited to sufferers from Alzheimer’s disease and drunken bums.

 

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The fascinating history of how Jefferson and other Founding Fathers defended Muslim rights

Image result for thomas jeffersonMuslims are at the center of today's roiling debate over religious freedom in the United States. But they've actually been a part of that heated conversation from the very beginning of the nation's founding.

A number of the Founding Fathers explicitly mentioned Muslims — along with other believers outside the prevailing Protestant mainstream — as they outlined the parameters of religious freedom and equal protection.

Muslims, referred to in those years as "Mahometans" or alluded to as "Turks," likely lived in this country; an estimated 20 percent of enslaved Africans were Muslim. But much of the citizenry at the time didn't acknowledge that Muslims existed in America, according to several historians.

So unlike Jews and Catholics, Muslims were discussed in the hypothetical — and often with negative opinions, including those held by Thomas Jefferson — to show "how far tolerance and equal civil rights extends," said Denise Spellberg, author of "Thomas Jefferson's Qur'an: Islam and the Founders."

"In the formation of the American ideal and principles of what we consider to be exceptional American values, Muslims were, at the beginning, the litmus test for whether the reach of American constitutional principles would include every believer, every kind, or not," Spellberg said in an interview.

Thomas Jefferson's defense of religious liberty

Jefferson authored the Virginia Statute for Religious Freedom and asked that it be one of just three accomplishments listed on his tombstone. The Virginia law became the foundation of the religious freedom protections later delineated in the Constitution.

Virginia went from having a strong state-established church, which Virginians had to pay taxes to support, to protecting freedom of conscience and separating church and state. Jefferson specifically mentioned Muslims when describing the broad scope of protections he intended by his legislation, which was passed in 1786.

"What he wanted to do was get the state of Virginia out of the business of deciding which was the best religion, and who had to pay taxes to support it," said Spellberg, a professor of history and Islamic studies at the University of Texas at Austin.

During the bill's debate, some legislators wanted to insert the term "Jesus Christ," which was rejected. Writing in 1821, Jefferson reflected that "singular proposition proved that [the bill's] protection of opinion was meant to be universal."

He continued:

Where the preamble declares, that coercion is a departure from the plan of the holy author of our religion, an amendment was proposed, by inserting the word "Jesus Christ," so that it should read, "a departure from the plan of Jesus Christ, the holy author of our religion;" the insertion was rejected by a great majority, in proof that they meant to comprehend, within the mantle of its protection, the Jew and the Gentile, the Christian and Mahometan [Muslim], the Hindoo [Hindu], and Infidel of every denomination."

 

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President Obama Signs First Federal Free-Range Kids Legislation

Image result for schoolToday, when President Obama signs the Every Student Succeeds Act, he will be signing into law the first federal Free-Range Kids legislation. An amendment added by Sen. Mike Lee (R-Utah) states that:

"...nothing in this Act shall...prohibit a child from traveling to and from school on foot or by car, bus, or bike when the parents of the child have given permission; or  expose parents to civil or criminal charges for allowing their child to responsibly and safely travel to and from school by a means the parents believe is age appropriate."

A caveat adds, "...nothing in this section 10 shall be construed to preempt State or local laws.’’

So, yes, there is still wiggle room for states to criminalize parents who trust their kids to walk to school (or who sleep through them doing this on their own). But it's a great start. You can find the law right there on page 857, after 856 absolutely riveting pages of other clauses and sub-clauses. 

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Students Demands for UC Endowment Divestments Spike Tuition Costs

Despite student demanded divestment causing tuition to spike, Black Student Unions at the nine University of California campuses passed a manifesto demanding America's worst performing endowment divest of racist private prisons.

The $13.15 billion UC system endowment generate the worst investment returns of any of the top 10 universities in America over the last decade, according to The Center for Investigative Reporting.

With annual returns of just +7.3 percent versus +10 percent for the average of the other largest collegiate endowments, underperformance cost the university a staggering $1.4 billion.

That $140 million annual underperformance explains why the University of California was forced to more than double tuition over the same period. As a result, two-thirds of Californians rate affordability at America’s largest public college system as “poor”.

Most analysts blame the lousy performance on politicization of investment decisions by student and faculty activists against a range of target, such as energy and Israel.

But that seems inconsequential to the UC student led Afrikan Black Coalition (ABC), which released a report last month on its website supposedly revealing how the UC system's $23 million stock holding is a racist action as an “indirect investor of private prisons through mutual funds-managed by outside investment bankers.”

The ABC claims that mass incarceration is a serious issue in America. They spotlight California for being ordered in 2011 by the U.S Supreme Court to release 30,000 prisoners as a way to help alleviate overcrowding in its state penitentiary system. ABC added, “While the state of California only built three CSU campuses and one UC campus in the last 30 years, 23 prisons were built in that same time frame.”

ABC views such investing as, “the UC actively fueling the racist criminal justice system while publicly aiming for more “diversity” within their own campuses.” ABC equates, “Any contribution to the for-profit private prison industry is a direct and unethical approval in further dehumanizing Black, brown, and immigrant people for capitalistic gains.”

Politicized investing is standard operating procedure at the UC system’s Office of the Chief Investment Officer of the Regents, which manages a total investment portfolio of approximately $91 billion of pension, endowment and other related investments.

At what looks to have been the bottom in prices for oil and coal stocks in September, student outrage led to the $200 million divestment of all the UC endowment and pension fund coal and oil sands companies over CO2 concerns.

A degree from a prestigious academic institution, such as the University of California, was once perceived as the social elevator to a higher net worth. But the Federal Reserve estimates that 40 million Americans in their early 20s racked up an average of four loans with an outstanding balance of $29,000 to get a college degree.

Total U.S. student debt now stands at $1.323 trillion and is growing at the staggering rate of $2,726 per second. With a 160 percent rise over the last decade, student debt is now the second only to mortgage debt as the largest category of debt in America.

 

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The omnibus spending package: good energy policy, bad energy policy

Image result for good energy policyThe decades-old legislation that prevented American producers from exporting oil is officially overturned—despite previous presidential threats to veto a bill to lift the oil export ban. That’s good policy. However, to get the support of “reluctant Democrats,” The Economist reports: “an additional five years of tax credits for wind and solar power” was part of the package. That’s bad energy policy.

While it will likely be months before the first tanker of crude oil leaves U.S. shores, the benefits of lifting the ban are already being felt as the spread between the global benchmark price, known as Brent, and the U.S. benchmark, known as WTI (for West Texas Intermediate), has shriveled to the smallest in years. Because U.S. crude had limited markets—and the crude being produced by the shale revolution didn’t match what many American refineries needed—its price was forced down to make it more attractive to refineries. At one time the price differential between the two benchmarks was as high as $30 (September 2011). Between 2011 and 2013, the spread has been closer to $10 to $25 a barrel. Once some of the bottleneck of U.S. production was relieved when the southern leg of the Keystone pipeline was opened and limited amounts of light crude were approved for export or swap, the gap began to really shrink. On December 11, the spread was $2.31 per barrel. Once the export ban was lifted, it dropped to only a $1 difference—with a brief blip of WTI being above Brent.

This helps American oil producers as it gives them a wider market for their product and allows them to sell oil at essentially the same price as the international benchmark prices—WTI goes up, Brent comes down. The lower global price helps consumers as the price of gasoline is based on the international price, not WTI.  The win/win makes for good policy—a win I have pushed for many times in the past year and predicted last year.

The bad policy comes as part of the bargain struck to get the Democrats on board: the Production Tax Credit for wind energy (which had already expired) has been revived, and the Investment Tax Credit for Solar power (which was scheduled to ramp down at the end of 2016) has been extended. Many Democrats wanted the taxpayer handouts made permanent. Instead the deal, part of the $1.1 trillion omnibus spending bill, gave only multi-year extensions to renewables.

Greentech Media explains the package: “the 30 percent Investment Tax Credit (ITC) for solar will be extended for another three years. It will then ramp down incrementally through 2021, and remain at 10 percent permanently beginning in 2022. The 2.3-cent Production Tax Credit (PTC) for wind will also be extended through next year. Projects that begin construction in 2017 will see a 20 percent reduction in the incentive. The PTC will then drop 20 percent each year through 2020.”

A reader of the Greentech report named “Chuck” responds: “Anyone know who [were] the key players who wrote and fought for the renewable credits?”

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Liberty and Sex on Campus

Image result for universitiesThere is an increasing movement on university campuses to require express and sometimes even written consent before parties engage in sexual activities – at each step of the way.  This is another example of trying to address every problem by passing yet another law.  Of course rapes and sexual batteries are serious matters, and they are rightfully criminal violations.  So when they occur, call the police!  But the present laws on the books are sufficient protection without universities taking the form of government and nosing even further into our bedrooms and private lives.

                And talk about the Law of Unintended Consequences.  Does anyone seriously think that imposing these consents upon sexual activity will do anything good?  Without even addressing the dampening effect it will place upon emotional relationships, what should those written consents say?  "May I take off your shirt?" or, "That takes care of the left shoe, how about the right?"  And, by the way, which partner will keep them?  And for how long?  What is to keep the custodian from destroying it the next day?  Or the non-custodial party from saying that is what happened?  (Talk about "He said; she said.")  Furthermore, in today's world those written consents could really have marketable value.  In fact in some cases, particularly when one lover has been jilted, they would probably even be auctioned on the Internet!  "Having trouble finding a sex partner, here are the names of some active potentials!"  The possibilities for mischief are virtually endless.  ("Have sex with me once more, or I will mail this consent to your sorority, parents or new boyfriend.")  So in this, like in most types of human activity, sexual relationships are matters of Liberty – and Responsibility!  And no university or other governmental do-gooding will change those facts.

 

                                                                                                                                                                                                     By Judge Jim Gray (Ret.)  - Honorary board member                                                             

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HIT & RUN BLOG Millennials: Disillusioned, Politically Disengaged, And...Getting More Libertarian!

Image result for LibertarianThe big headlines coming out of a new Harvard Institute of Politics poll of millennial voters (ages 18 to 29) have been that almost half believe the "American Dream" is dead. Just 17 percent think the country is heading in the right direction, versus 44 percent who thinks it's going south and another 37 percent who aren't sure.

Those sorts of findings paint a picture of a disillusioned, despondent group but they only scratch the surface of the poll's genuinely comprehensive and interesting look at millennials. There's actually a lot positive news in the findings, especially from a libertarian perspective. Twenty-five percent classified themselves as politically independent (not leaning toward either Republicans or Democrats) and only 9 percent considered themselves "strong Republican" and 17 percent "strong Democrat."

For all the talk about political correctness and continuing racism on campus, 51 percent agreed with the statement "I feel comfortable sharing my political opinions at my college without fear of censorship or negative repercussions." Just 14 percent disagreed, suggesting that campuses are neither the hotbeds of repression or racism that various people seem to believe.

This bit, with its Reaganite undertones, jumped out at me:

IOP-HarvardIOP-Harvard

As Reason found in its 2014 poll and analysis of millennials, there's not a huge amount of super-tight philosophical consistency throughout the results. Yes, "government is the problem," but at the same time, large numbers of millennials want more government spending on...well, the things that would come their way (education, health care, etc.).

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Christmas Comes Early for Teachers Unions and Obama Administration With No Child Left Behind Rewrite

Image result for WHITE HOUSE CHRISTMAS“It’s like Christmas Day,” exclaimed Lily Eskelsen García, president of the National Education Association, the nation’s largest teachers union. García was referring to passage of the Every Student Succeeds Act (ESSA), which was signed into law by President Barack Obama—who similarly referred to the new law as a “Christmas miracle”—earlier Thursday.

On Wednesday, the U.S. Senate passed the measure, which reauthorizes the Elementary and Secondary Education Act (ESEA), the most recent iteration of which was No Child Left Behind. The Every Student Succeeds Act passed the Senate by a margin of 85-12 and in the U.S. House by a vote of 359-64 in late November (this included every Democrat who voted in both the House and Senate).

According to Politico, “victory certainly didn’t just land in the laps of union leaders. The National Education Alliance and the American Federation of Teachers are on track to spend $3.7 million combined lobbying Capitol Hill before 2015 is done.

“The National Education Alliance calculates that it has held 2,300 face-to-face meetings with lawmakers this year. Members have sent 255,000 emails to Capitol Hill and made 23,500 phone calls, according to NEA’s calculations.”

Politico goes on to report:

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