The Right Coast

Editor: Thomas A. Smith
University of San Diego
School of Law

A Member of the Law Professor Blogs Network

Thursday, April 30, 2009

Chrysler reorganization
Tom Smith

I know, I'm going through a youtube phase.  Anyway, the Chrysler bankruptcy and the promise that it will emerge with a "new lease on life" reminds me irresistably of this brilliant moment in our animation culture:

April 30, 2009 | Permalink | Comments (3) | TrackBack (0)

Cathy Lynn Grossman asks who is a good Catholic
Tom Smith

Well, this is pretty dumb.  But in a way, I like it.  I think by this reasoning, since Professor Glendon was appointed envoy to the Vatican by Evil Incarnate (that is, George W. You Know Who), and she is too good to accept the Laetare Medal from Notre Dame, this must mean that anybody who did not sully themselves with an association with the Hated One must be very good indeed!  So that means that I must have more ethical wiggle room than a catepillar in a terrorist's torture cell.  I call that pretty comforting.  Fast cars and faster persons of the gender of my choice, here I come!  And if somebody wants to give me a medal, well bring it on.

On a related point, I really think it is time for all good Obamabots to gang up on Professor Glendon just like our Faith & Reason Blogger at USA Today.  Who precisely does the Professor think she is?  Just because her conscience and 40 US Bishops and various fancy documents are telling her something is wrong, she is going to drizzle on Obama's parade?  What nerve.  Lah-dee-dah.  Little Miss Moral Paticularity.  She probably thinks a fetus is person and all that rubbish.  I mean, duh, Professor, get a life!  Have some fun!  Let your hair down!  You only live once!  If you're lucky! In my day, harumph, it was Country first and God second.  Just because Notre Dame wants to use you to provide it cover when it is being used by Obama to provide cover to Catholics who don't want follow Church doctrine, that's hardly reason to get all high and mighty.  Nobody likes a party pooper.  

Speaking of medals, I can't resist putting this in:


April 30, 2009 | Permalink | Comments (8) | TrackBack (0)

My favorite Red
Tom Smith

Pete Seeger!  Can you think of one you like better?  I can't.  

It reminds me of this ditty from Yale's Party of the Right.  (No, I am not now nor have I ever been a member of the POR.  It's By Invitation Only, those elitists.)

This land is my land!
It isn't your land!
If you don't get off
I'll blow your head off!
I've got a shotgun
And you ain't gaw-ough-t one!
This land was made for only me!

Property rights.  The cornerstone of liberty.

April 30, 2009 | Permalink | Comments (19) | TrackBack (0)

No sacred cows
Tom Smith

Mooore here.

April 30, 2009 | Permalink | Comments (1) | TrackBack (0)

Why can't those silly creditors see that the Government just wants to help them?
Tom Smith

What a hoot:

Earlier Thursday an administration official said the restructuring of Chrysler LLC will go forward even though a handful of hedge funds have refused to accept the Treasury Department's offer to cut the auto maker's debt.

"Their failure to act in either their own economic interest or the national interest does not diminish the accomplishments" by Chrysler, its planned alliance partner Fiat SpA and other stakeholders in the company, the official said, "nor will it impede the new opportunity Chrysler now has to restructure and emerge stronger going forward."

"After a month of tireless negotiations, the administration went into yesterday afternoon with the full support of Chrysler's key stakeholders, including the UAW and the largest creditors," the administration official said. "That support remains."

Some of the largest banks agreed to take $2 billion in cash in exchange for giving up $6.9 billion in secured debt. On Wednesday that auto task force increased the offer to $2.25 billion, but a few of the creditors rejected that.

"While the administration was willing to give the holdout creditors a final opportunity to do the right thing, the agreement of all other key stakeholders ensured that no hedge fund could have a veto over Chrysler's future success," the official said.

Boy, the Treasury is acting like it just doesn't care whether it hurts the hedge funds' feelings.




April 30, 2009 | Permalink | Comments (4) | TrackBack (0)

McArdle on the first 100 days
Tom Smith

McArdle writes:

. . .  Obama's performance thus far ought to offer some clue: has he set the stage for economic victory, or defeat? In some sense, for all its exertions, the Obama administration hasn't actually done all that much.

There is, to be sure, the stimulus. It is indeed large, filled with scores of spending plans, alleged to be "temporary." Like the recently discontinued tax on telephone service -- originally enacted to fund the Spanish-American War -- many of these programs will undoubtedly be with us for decades to come. As of now, however, most of the stimulus money remains to be spent.

Yet while the stimulus package will provide some modest boost to aggregate demand, it in no way addresses the central problems the Obama administration faces. The Medicare and Social Security systems are about to start draining the budget, rather than contributing to it. The "stress tests" are starting to tell us what we already knew: Large parts of the banking sector need more capital, which won't be easy to raise in the current economic environment. The recession, and especially the decline of Wall Street, is badly undercutting Federal tax revenues. All of these problems are just revealing themselves. And they will get worse before they get better.

So far, Obama's only proposal for dealing with the funding shortage is a tax increase on high earners, leaving "95% of working families" untouched. But the math doesn't work. In 2006, the latest year for which data are available, the top 5% of families took home a whopping 36% of national taxable income, and paid 20% of that, or around $600 billion, in Federal income tax. But even before the president's ambitious health care plan emerges from the Congressional policy grinder, the CBO estimates that his budget plans to spend an additional $400 billion each year. He's not going to get there with a small, or even a large, tax increase on high earners. For one thing, the share of national income collected by the top 5% has undoubtedly dropped sharply since 2006, because their incomes tend to depend more on capital and business income, and on bonuses, all of which have fallen off. (That's why tax revenues fell off so steeply in 2001.) And work by economists Thomas Piketty and Emmanuel Saez suggests that the deeper the crisis, the longer and deeper the hit to top incomes: the lessening of the gap between rich and poor during the fifties and sixties may in fact have been largely attributable to the deleterious effects of the Great Depression and World War II.

Even if this weren't the case, it's not really feasible to pay for everything simply by doubling taxes on the wealthy -- because federal income taxes aren't the only taxes they pay. Higher incomes are disproportionately concentrated in places with high state and local taxes, like New York City. There's a practical limit to how high a percentage of income you can take from even the wealthiest financier, not least because they have more discretion about how, and whether, they make money, which means that raising taxes above a certain level rapidly starts depressing the amount of income available to tax. Even most European countries don't try to pay for their welfare states just by soaking the rich.

Up until now, Obama has largely done the fun part of governing: promising people free stuff. To be sure, even some of that is fairly unpopular, but the auto bailouts have undoubtedly pleased the UAW more than they have angered the rest of the population, and most of the bank spending has occurred under programs originated in the Bush administration. Now, however, the bill for Obama's central proposals is about to come due. Unless Obama thinks he can borrow something like a trillion dollars a year indefinitely, he is going to have to ask Americans to make sacrifices to pay for the goodies.

April 30, 2009 | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 29, 2009

Steve Forbes on socializing health care
Tom Smith

Here.

April 29, 2009 | Permalink | Comments (3) | TrackBack (0)

Sometimes bad news is really bad news
Tom Smith

Wait. Wait.  Did it move?  Just a little?  Do you feel something?  See that slight shift in the soil?  Could it be a green shoot?

Nope.  The GDP numbers are bad, really bad.  If I were a short term investor, I would be so out of this market.  I personally feel, as Miss South Carolina might say, that the economy is going to get a lot worse before it gets better, if it gets better.  The banks are not getting fixed, credit is not flowing freely, taxes are apparently on their way up, and both a carbon tax and health care "reform" are looming disasters. These are not things that promote investment.  I suspect we are in the economic equivalent of the phony war period.  Just wait.  But I could be wrong and I hope I am.  But kid not yourself.  These GDP numbers are awful.

April 29, 2009 | Permalink | Comments (2) | TrackBack (0)

You suck. Now git.
Tom Smith

College rejection letters.  They vary.

April 29, 2009 | Permalink | Comments (3) | TrackBack (0)

Dippin' Dots are disgusting
Tom Smith

I'm sorry, but tolerance only goes so far.  I'm sorry to disagree with David on this, but Dippin' Dots are a disgrace to dairy products.  You wouldn't think you could ruin ice cream, but it turns out, you can. Imagine melting ice cream and then refreezing it, say, 100 times.  Then finally dribble out the moosh onto the floor of an old freezer, scrape them off, and them eat a little carton of them.  That's what Dippin' Dots taste like.  Or maybe like ice cream made out of frozen Coffee Mate.  Grim.

April 29, 2009 | Permalink | Comments (3) | TrackBack (0)