The Vice President today commended the new owners of Republic Windows and Doors, a Chicago window manufacturing plant that was shuttered late last year, resulting in the lay-off of its 250 union workers. Republic was purchased in bankruptcy court last week by Serious Materials, a California-based company that makes energy efficient windows. Serious Materials has announced plans to reopen the Republic factory and to eventually rehire all 250 of its laid-off workers at their former pay levels. Serious Materials said it purchased Republic because the Recovery Act will increase demand for its products.

That which is not seen: The jobs lost elsewhere in the economy because of: higher taxes, crowding out of private investment by government deficits, entrepreneurial paralysis in the midst of never-ending and always-changing regulation, rent-seeking, government waste, political corruption, and the perpetual font of self-congratulatory hubris from politicians, bureaucrats, their pundit apologists, and all the other central-planning fetishists.

Enjoy the windows…

Previously:
–Maybe We'll Be Really Fortunate and Mount St. Helens Will Erupt
–Obama's Broken Window Fallacy

From the Introduction:

Political expression is at the heart of First Amendment activity and the Supreme Court has granted it great deference and protection. However, according to the Court in its landmark 1976 decision, Buckley v. Valeo [424 U.S. 1 (1976)], an absolutely free political marketplace is not required by the First Amendment — nor is it desirable — because without reasonable regulation, corruption will result. Most notably, the Buckley Court ruled that the spending of money in campaigns, whether as a contribution or an expenditure, is a form of "speech" protected by the First Amendment. The Court upheld some infringements on free speech, however, in order to further the governmental interests of protecting the electoral process from corruption or the appearance of corruption.

Buckley v. Valeo and its progeny are on my list of the Ten Worst Supreme Court Cases.

The schizophrenic holding of Buckley (i.e., that spending money on a campaign is "speech" but that contributing money to a campaign is not), combined with relentless legislative attempts to push the campaign-finance envelope, have resulted in over thirty years of follow-up litigation. This 50-page report summarizes that litigation. A good reference volume (if for something that should not need a reference volume).

One should of course also note that the rationalization behind restricting campaign donations (i.e., to fight corruption) would be unnecessary if the government were so small and limited in its functioning that there were nothing and no one to corrupt (cf., "a bleeping valuable thing").

Previously:
–Campaign Finance Reform is Dead — Long Live Campaign Finance Reform!
–Supreme Court Has (Yet Another) Chance to Eradicate McCain-Feingold
–Bloomberg: Ban Campaign Contributions by Businesses
–Regulation of Political Blogs Back in the News

Previous CRS Recommendations:
Federal Civil Rights Statutes
The South Ossetia Conflict
Congress and the States
Political Activity by Tax-Exempt Institutions
The Law of Church and State
Constitutional Limits on Hate Crime Legislation
Same-Sex Marriage — Legal Issues
Saudi Arabia
The National Debt
Restricting Video Game Sales to Minors
Warrantless Wiretapping
Foreign Holdings of Public Debt
China's Internet Censorship
Summary of Rumsfeld v. FAIR

Stimulating the economy by building infrastructure projects may have made sense in the 1930s when the work force consisted almost exclusively of healthy adult males (white, of course, but that's another blogpost).

How, I wonder, will an all-Democratic government deal with lawsuits claiming that a "new WPA" violates Title VII, the Americans With Disabilities Act, the Rehabilitation Act, the Age Discrimination in Employment Act of 1967, the Age Discrimination Act of 1975, etc., etc., etc.

Fast forward to today:

Mr. Obama compared his infrastructure plan to the Eisenhower-era construction of the Interstate System of highways. It brings back the Eisenhower era in a less appealing way as well: there are almost no women on this road to recovery.

Back before the feminist revolution brought women into the workplace in unprecedented numbers, this would have been more understandable. But today, women constitute about 46 percent of the labor force. And as the current downturn has worsened, their traditionally lower unemployment rate has actually risen just as fast as men’s. A just economic stimulus plan must include jobs in fields like social work and teaching, where large numbers of women work.

The bulk of the stimulus program will provide jobs for men, because building projects generate jobs in construction, where women make up only 9 percent of the work force.

Mark my words: This issue will not go away. Given the Democratic Party's structure as a mosaic of factional special interests, each of those interests will find something to grumble about. And perhaps, claiming discrimination, even sue over. And the only resolution even remotely tolerable to a liberal Congress and president will be to expand the boondoggle program beyond "vital infrastructure" so that there is something for everyone. Even if the final version turns out not to be so "vital" after all.

Just you wait.

Previously:
–On the Calls for an Infrastructure Stimulus
–Rohatyn's Big Ditch

1. General Motors is not "the U.S. auto industry." The Big Three are not "the U.S. auto industry." There are many different metrics (vehicle production, revenue, employment, etc.) but a good benchmark is that the Big Three represent only about one-half of "the U.S. auto industry." The other half is doing just fine, thank you very much.
2. If the Big Three are "responsible" (defined how?) for 1 in 10 American jobs, then doesn't simple arithmetic tell us that 9 out of 10 jobs are not dependent on the Big Three? So why should those jobs be put at risk, via higher taxes and deficits, for the 1 in 10 that are?
3. "Bankruptcy" is not the same as "liquidation." No one is seriously suggesting that General Motors be liquidated, all its plants shuttered, all its equipment left to rust and all its employees let go. Any obfuscation on this point is disingenuous fear-mongering.
4. Speaking of disingenuous fear-mongering, First Prize goes, unsurprisingly, to UAW chief Ron Gettelfinger:
   

   If a major domestic auto company were to fail, a significant number of supplier companies would also be in jeopardy. This would quickly affect all the companies that produce autos in the United States — including Toyota, Honda and Nissan — because many of them buy parts and services from the same group of suppliers.

   Of course, it is just as likely to predict that whatever decline in Big Three supply might occur from a bankruptcy (but see Point #3 on "bankruptcy versus liquidation") could be picked up by the other half of the "U.S. auto industry" (i.e., Toyota, Honda, Nissan, etc.). Disruptive? Sure? Slow? Absolutely? Catastrophic? No. Unacceptable? Hardly.

5. Another great line from Gettelfinger:
   

   The reality of today's auto industry is that union-made vehicles are winning quality awards and that union-represented factory workers are winning productivity awards.

   The cars win awards, alright. They just don't sell. Which should matter more to the taxpayers who are now being asked to fund a bailout?

6. Back to the topic of bankruptcy: The simple truth is that taxpayers will bail out the Big Three one way or the other. If General Motors, Ford or Chrysler declare bankruptcy, then the primary result will be the ability to pawn off their pension obligations to the PBGC — which, despite its propagandistic insistence that it is self-funding, cannot possibly absorb those new liabilities and will have to be bailed out out by taxpayers anyway (cf., this post). So why not at least get a corporate restructuring out of the process anyway — as happened with the airlines?
7. Wesley Clark is an ass — see Point #1. Does anyone seriously think the U.S. would ever face a debilitating tank shortage? How many tanks are currently deployed in Iraq and Afghanistan? Thank goodness Hillary Clinton never had a chance to make this loon the Democratic version of Dick Cheney.
8. Speaking of asses, why is it that the New York Times editorial board sees fit to demand that a Big Three bailout (not an "auto industry bailout" — See Point #1) include compulsory firing of top management and elimination of stock dividends, but not compulsory freezes on all wage, benefit and pension increases — or, for that matter, the ability to strike? All that the Times asks of Big Labor is that they "reopen agreements on pay and benefits." Given that lavish compensation has been and continues to be at least part of the problem, why the double-standard?

When I was an undergraduate, twenty years ago, the hottest topic in economics classrooms was — care to guess? — "the decline and fall of the U.S. auto industry." A tattered paperback copy of David Halberstam's The Reckoning, published in 1986, still sits on my bookshelf. To butcher a famous line: They have been dying from the same heart attack for twenty years. The Big Three (one last time: not "the U.S. auto industry") and their UAW co-conspirators have been getting it wrong for a generation or more.

Enough is enough.

Roberts County, Texas, sits atop the Ogallala Aquifer, a huge underground reservoir that stretches all the way to South Dakota. It's in Roberts County that T. Boone Pickens set aside eight acres from his ranch for drilling deep into the aquifer.

Then he turned this parcel into a town, basically, with only two eligible voters — both of whom were his employees. (This required a change in Texas law in 2007 — a change facilitated no doubt by his $1.2 million in campaign contributions to Texas legislators in 2006).

Then there was an election in this district, in which both voters voted to make this 8-acre municipality a special fresh-water district.

Pickens' wholly owned government entity now can issue tax-free bonds (meaning he can borrow at a serious discount) and use the power of eminent domain to pressure landowners to sell — or to take their land if they hold out. The eminent domain power is key to building the pipeline that will run this water down to the Dallas area, where Pickens hopes to sell the water. … If this begins to sound too cutthroat to the public, Pickens just reminds journalists and politicians that following this water pipeline will be the transmission cables for Pickens' mammoth wind farm.

I actually believe that over the very, very long run — say 200 years — wind (along with nuclear) will indeed be the ultimate solution to the assorted "problems" of petroleum-based civilization (unless we succeed in developing oil-excreting bacteria). I would prefer of course that the transition happen in a natural — i.e., capitalist — way, with oil gradually becoming so expensive (but never running out) that wind-based power becomes an attractive alternative without any governmental subsidies (coupled with a post-biotech willingness to divert land currently devoted to agriculture over to wind farming).

Then again, I'm no Pickens:

Pickens recently announced he will spend some $3 billion on a wind farm on his own property in Texas to take advantage of the generous subsidies for wind power. Pickens said he expects a 25% return on investment in his wind project. He has said he contemplates a total investment of $10 billion in Texas wind.

[Glenn] Schleede, a veteran energy analyst who was a major official in the Reagan administration Office of Management and Budget, and has been an anti-wind gadfly for more than a decade, argues in a May 13 paper that the Pickens announcement is powerful evidence why the wind subsidy is a mistake.

"Wind farms," argues Schleede, a former coal industry lobbyist, "are being built primarily for their lucrative tax benefits and subsidies — not because of their environmental and energy benefits." The Pickens wind investments, he says, amount to "a 25% return with little risk."

The federal production tax credit alone will yield an estimated $2.45 billion in benefits for Pickens. On top of accelerated depreciation rules, state and local tax breaks, energy credits and other less-than-free-market "investment returns."

As another long-time Pickens critic sums up nicely:

Watching Pickens talk about the United States' energy industry is like watching a CEO talk about the way a company is run. He would shift natural gas from electricity generation to transportation, replacing a third of our gasoline consumption with natural-gas-powered cars; then he would expand wind power to fill the gap in electricity generation.

But Pickens isn't the CEO of America. He's not the boss of me or of my power company. What do his big dreams for our energy economy have to do with anything? Isn't he a billionaire investor? If he thinks wind is the electricity source of the future, good for him.
…
Watch the video he has on PickensPlan.com. After walking through his vision for the country, he tips his hand: "We have to have the right leadership, and everybody in this country has to cooperate. We have to get on the same team; we have to march in the same direction."

"Leadership … march in the same direction …" Pickens is talking about government. He's talking mandates and subsidies. And these government programs would profit him.

I would have preferred an alternative to the noble word "profit" — do we call a burglar's loot his "profit"?

Actually, Pickens doesn't remind me at all of a CEO talking about the way a company is run. He reminds me of Robert Moses talking about how some people had to be — his term — "inconvenienced" (i.e., by rampant eminent domain, often of entire neighborhoods) for the good of the entire city (or region or nation or whatever). With him doing the "inconveniencing" of course.

Have we learned nothing from Robert Moses? Have we learned nothing from the ethanol debacle? Are we still unwilling to acknowledge that all politicians (and their puppetmaster sponsors like Pickens) are, by definition, moral defectives? That they rarely hesitate to buy and sell their votes — and your rights — to the higher bidder in the most evil "market" of them all — the market for government power?

Apparently not:

McCain said he has a long record of support for alternative fuels. Asked specifically if he was for renewing tax breaks for wind and solar that expire this year, he said, "of course."
–Wall Street Journal, 15 August 2008

"He's a legendary entrepreneur and one of the things that I think we have to unify the country around is having an intelligent energy policy."
–Barack Obama, discussing T. Boone Pickens, 17 August 2008

Whoever wins in November, so does Rent-Seeker Pickens. "Legendary Entrepreneur" Pickens, if he ever really existed, is long dead.

Previously:
–Merck Buys Rent-Seeking HPV Vaccination Order from Texas Governor
–Another Texas "For the Children" Rent-Seeking Scandal
–"Entrepreneur" Rent-Seeks a Privacy Violation From His Educrat Brother

1. The lack of necessity. (ACLU: "We are not questioning the school district's ability to use GPS to monitor school buses. But it's a quantitative leap to monitor children themselves.")

2. The privacy issues. (Parents can opt out and the tags only convey a proprietary number and no personal information.)

3. The glaring conflict of interest in the program:

Ed Collins, the district's facilities manager … is the brother of Chris Collins, who founded MAP Information Technology last year. The district did not need clearance from the state ethics commission to set up the testing, however, because the program is free during the pilot, Kraeger said.

I vote for Number 3.

Incidentally:

The district, which serves about 2,500 students, is the company's only client, said Deborah Rapp, the company's director of marketing and communications.

Whatever happened to "avoiding even the appearance of impropriety"? Oh right, I forgot: politicians and bureaucrats do not subscribe to that pesky principle. Their version is: "Can we get away with it?"?

The fact that the school district is getting something for free overlooks the symmetrical fact that "businessman brother" is also getting something for free: trial data, user feedback, etc. Via a taxpayer-funded government entity and without any compensation to the school district (and by proxy the taxpayers who fund it), and without any competitive bidding. To "school district brother" and his co-conspirators, this seems perfectly innocuous?

So I guess we have a hat trick: privacy incursions, kids as guinea pigs, rent-seeking. Rick Perry would be proud.

(Via Out of Control.)

The Texas legislature undid Perry's despicable rent-seeking maneuver. Which means they did the right thing — if only for a few weeks:

Fitness guru Dr. Kenneth Cooper of Dallas teamed up with Sen. Jane Nelson, R-Lewisville, to author legislation that would require schools to monitor students' health to prevent childhood obesity.
…
The wording in the bill that describes the required testing tool mirrors language on the Web site for Cooper's FitnessGram, developed in 1982 to measure health and fitness levels of children.
…
The FitnessGram would cost about $230 for each child when purchased from its distributor, Human Kinetics. The nonprofit Cooper Institute receives $30 from each sale. … [T]he Cooper Institute will apply to be the vendor.

First of all, "making money from selling stuff" is hardly my definition of "nonprofit" (cf., the scandalously "profitable yet supposedly non-profit" AARP).

Meanwhile, do educrats, school nurses and PE instructors really need a $230/student test to tell them something that a scale and tape measure can't?

I will, however, give Cooper credit for one thing: he is a far slicker huckster than the marketing department over at Merck:

But Cooper said he believes so strongly in the testing regimen that he is willing to put that money back into the program. He also said he will help raise the money to implement the program, which could cost between $5 million and $8 million.

One must admit, it takes a lot of creativity (and chutzpah) to buy a monopoly franchise from a state government and then repackage it as "philanthropy."

You may have heard that the Texas legislature, along with its counterparts in California and Florida, essentially dictate the educational curricula for the entire nation because textbook publishers have little choice but to produce the books that those three states, at 30% of the market, want to buy. This "Fitnessgram" snake oil may well exhibit the same economics. Even if Cooper "charitably" discounts his program or otherwise "gives back" his "nonprofit profits," he will still have bought, from Texas politicians, a market share that will allow him to undercut other providers of such services (see generally, "economies of scale"). And of course he will be able to ("philanthropically") leverage the Texas contract in his marketing: "Used by all Texas schools…." or "The official fitness program of the Texas Education Agency…"

Like I said: chutzpah.

To the extent that a "War on Childhood Obesity" should be waged at all, it might — somehow — be the case that more is needed than a scale and tape measure — I'm skeptical. But surely it — whatever "it" is — can be done for less than $230/student every year, and done in a way that doesn't unduly enrich (reputationally if not financially) a single rent-seeking person or firm, no matter how "non-profit" or "philanthropic" they pretend to be.

(Via Junkfood Science — which peeks under the hood of the "FitnessGram" program and finds it — to use its own terminology, "underfit.")

By issuing an executive order, Perry apparently sidesteps opposition in the Legislature from conservatives and parents' rights groups who fear such a requirement would condone premarital sex and interfere with the way parents raise their children.

Beginning in September 2008, girls entering the sixth grade — meaning, generally, girls ages 11 and 12 — will have to get Gardasil, Merck & Co.'s new vaccine against strains of the human papillomavirus, or HPV.
…
"The HPV vaccine provides us with an incredible opportunity to effectively target and prevent cervical cancer," Perry said in announcing the order.

"If there are diseases in our society that are going to cost us large amounts of money, it just makes good economic sense, not to mention the health and well-being of these individuals to have those vaccines available," he said.

This is, of course, utter nonsense.

There is a very simple distinction between HPV / cervical cancer and the traditional childhood diseases such as measles, mumps or polio that we target for universal mandatory vaccination — HPV is not casually contagious; neither is cervical cancer.

Or, in the language of economists, there are objectively identifiable, and substantial, positive externalities to universal vaccination against traditional childhood diseases. No such externalities exist in the case of HPV and cervical cancer.

(Incidentally, the connection between HPV and cervical cancer is itself barely measurable. Furthermore, HPV infection is neither lethal nor debilitating; it is, in fact, generally asymptomatic. This is, for the most part, a faux crisis concocted by Merck to scare people into wanting its vaccine.)

It's unfortunate, meanwhile, that the opponents of compulsory HPV vaccination are not those who oppose the "compulsory" part, but rather the "vaccination" part (i.e., radical conservatives who irrationally conclude that vaccination will somehow catalyze teenage promiscuity).

If you follow Governor Perry's reasoning (which, ironically, sounds a lot like Paul Krugman's reasoning), then you must conclude that it would be also a proper function of government to require parents to force feed vitamins to their children, or to impose mandatory infant male circumcision. There is no cognizable difference.

After that can come mandatory daily viewings of Sesame Street, or violin lessons, or summer camp. For "the health and well-being of these individuals."

—

Governor Perry mentioned "good economic sense" — especially for Merck and its conflict-infected lobbyists:

Merck has doubled its spending on lobbyists in Texas this year, to between $150,000 and $250,000, as lawmakers consider the vaccine bill for girls entering the sixth grade.

Also, the drugmaker has hired one of the state's most powerful lobbyists, Mike Toomey, who once served as Republican Gov. Rick Perry's chief of staff and can influence conservatives who see him as one of their own.

Mind-boggling. How skillful a hustler does Perry have to be to issue this executive order with a straight face?

All politicians are, by definition, moral defectives. So too, apparently, are their former chiefs of staff. And shame on Merck for their unbrazen and unethical rent-seeking.

(Latter links via Medpundit.)

UPDATE: Merck has suspended its lobbying efforts for mandatory vaccination laws, apparently in response to the public outcry after the Perry incident.