Archive for November, 2011

CNN National Security Debate

I just barely made it home in time for tonight’s GOP debate. I would have made more of an effort, but I didn’t know there was a GOP debate tonight–I’ve stopped paying attention to the schedule since there’s one every week.

However, I’m glad I caught it. For those who missed, tonight’s debate focused on national security–in my mind, the second-most-important issue of this election (after the economy), and arguably, what should be the first priority of every President.

Some important issues came up tonight. Finally, the candidates had some real, strong disagreements. On economic issues, most of this field is generally on the same page, and so debates have been less debate-y and more focused on attempts to appear more conservative than everyone else, and/or maligning each others’ conservative cred. But I already knew that any one of them would be infinitely better equipped to handle the economy than our current President. So tonight we got to see where they really disagree, and that’s great.

For those interested, my thoughts on the candidates after tonight’s performance follow, in the order they were standing:

Santorum – Didn’t get much time to speak tonight, and sadly, that’s perfectly appropriate. We’re rounding the final curves in the primary race, and Santorum has failed to generate any appreciable interest at any point, in a volatile and vulnerable field. I appreciate his strongly conservative social and economic views, I share most of them. Not all, but most. I like that he was the only one tonight that didn’t hedge and clearly stated that, of course, some TSA profiling makes sense. But it’s time to bow out at this point and allow better focus on those with a chance to win.

Paul – After hearing Dr. Paul talk about economic issues in the last debate, I had warmed up to him. He’s so very often right on the economy, and he doesn’t care what anybody thinks about anything he says. Tonight reminded me why I can never support him for President. He seems to think that if America would just leave the world alone, the world would leave us alone too. He thinks Iran is no threat to anyone. He thinks the Taliban got a bad rap and the greatest threat to America is America overreacting to things. This is what happens when you hang out with 9/11 truthers.

Perry – Came across to me as unnecessarily aggressive. I hated when people accused President Bush of this, but when I was hearing Perry talk tonight about military strikes and no-fly zones, the phrase “cowboy diplomacy” kept popping into my head.

Romney – Had some great, well-rehearsed answers, just like the last debate. Absolutely right in his answer on the terribly important difference between dealing with crime and dealing with war; if a battalion of Nazis had come ashore in 1943, we wouldn’t have had the police arrest them and send them before a civilian court. Hence the difference between common criminals and those in Guantanamo. If we’re electing someone who is good at saying the right things, Romney is hard to beat. I’m still not sold on his conservative cred (there, now I’m doing it), but he keeps saying things I like to hear, and that kind of thing can wear you down. I’m just… not yet convinced that he’s anything more than a slick-talking empty suit. Governor Romney, prove to me that you’re more than that.

Cain – Clearly had very little to say. We all already knew this was his weakest area, tonight was a demonstration of that. It’s fine to fall back on the point that the President has expert advice available, but it’s also extremely salient to point out that, all else being equal, I’m much more comfortable with a Commander in Chief that’s extremely well-informed and personally knowledgeable on foreign policy and national security.

Gingrich – As always, he’s the smartest guy in the room, and it shows. On every question, he gave the sense that, whatever it is we’re going to do, his priority is to do it right or not at all. I really enjoyed his answer to Dr. Paul’s criticism about McVeigh–we don’t want a government that says, “If you blow up a major city, we’re sure going to get you!” We want a system that will stop terrorists before they strike. Newt also took a very courageous stand as the only candidate tonight that wasn’t willing to support mass deportation of 12 million illegal immigrants. He’s right. We need to be discerning. Someone that gets brought here at 3 years old, that grows up, loves this country and wants to serve in the military–that person should get a fast track to citizenship. Politics tends to be black-and-white, but I really appreciated the fact that he was the only one willing to point out that there are shades of grey in this issue. I’m feeling more and more strongly attracted to the idea of a President Gingrich.

Bachmann – I like Representative Bachmann. But I think it’s a bad sign that my first thought on her performance tonight was, “I’m pleased that she didn’t do anything embarrassing.” She made some good points here and there (as when pointing out to Dr. Paul that using privacy standards that assume people only use wired phones makes no sense in an age of disposable cell phones and internet), but seemed to have a hard time staying on topic. She came across tonight as not being quite prepared.

Huntsman – Frankly had no business even being at tonight’s event. Barely registers on any polls. Thinks living in China for a while gives him expertise on how to deal with the Middle East. Answers questions on the economy and national security by talking about the “trust deficit.” It’s time for Huntsman to go.

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Why Debit Card Fees Aren’t Going Away

And, a Deep Difference Between the Camps

A few days ago, Bank of America announced that it was canceling its planned $5-a-month debit card fees. Sen. Durbin (D-IL) immediately rejoiced on the Senate floor, taking partial credit for the change that he claimed was due to “a combination of reasonable regulation and consumers voting with their feet.” [1] Politico calls it “a win for President Barack Obama and Occupy Wall Street.” [2]

All of which is shortsighted. We’re still going to get charged those fees.

I pointed out in a previous post (see: Why Government Decisions Matter) that Sen. Durbin’s public attacks on BofA and their proposed fee were ironic, considering that the fee was a direct result of legislation he successfully attached to Dodd-Frank that capped debit card swipe fees charged to retailers. First off, expecting any other response on the part of the banks was ridiculous on its face, and demonstrates that he either has zero understanding of basic math, or the whole thing was a political song and dance meant to further endear the Democrats to those of an anti-Wall Street bent. Since Sen. Durbin does not come across as stupid, I will assume the latter.

For the record, it really is simple, basic math. If you write a law forcing a business to cut price X, they will respond by raising price Y. It’s that simple. Businesses aren’t going to provide services for free. If you regulate the price of a Big Mac to $1 (to help the poor!), McDonald’s will charge 6 bucks for a Coke. If you command that everything on the menu must be $1, then they will charge customers a $5 fee just to get in the door. See the result here–your actual price to get a combo meal goes up, and people that just wanted a Coke to begin with really get screwed. Or customers simply decide it’s no longer worth it to patronize these stores, and McDonald’s lays off employees due to loss of sales. It doesn’t matter that you intended to help the poor. This is the real-world effect of this type of government control over the economy.

Meanwhile, all of our taxes pay for the army of government bureaucrats working to enforce the harmful regulation, it’s harder and more expensive to start a business, and personal freedom is further eroded. (And Democrats continue getting votes because they say, “We cut prices on your Big Mac,” and the people cheer, and think no more of it.)

But I was talking about the debit card fees. They are not going away. The banks are going to get paid for that service. Dodd-Frank made them stop charging the way they were originally–so they attempted to put the fee up front. Everyone freaked out, so they took it back. This just means they’re going to put the fee somewhere else. Like a cover charge for McDonald’s, we will see interest rate changes, a reduction in some previously free service (like free checking accounts), etc. We’ll still pay the debit card fees. They’ll just be better hidden.

In a further irony, Sen. Durbin is now crusading against hidden and complicated bank fees–he wants them all simple and up front. Yet his policies help create the very situation he’s complaining about.

This is useful in that it illustrates a basic, fundamental difference between conservatives and liberals today. When presented with a problem, liberals often see a need for the government to step in and solve it. Conservatives, on the other hand, often want the government out of the way–because we understand that government solutions always have these unintended consequences.

In 1993, President Clinton attempted to deal with “unfair” CEO pay by capping the salary a company could write off on corporate taxes at $1 million. The next year, the ratio of CEO-to-worker pay, relatively stable for decades, began a ten-year spike that peaked at around 300:1. [3] Businessweek wrote that, “As a practical matter, the law… quickly established $1 million as the minimum base pay any self-respecting CEO expected from a major corporation.” [4] Companies began avoiding the new tax by paying CEOs in stock rather than straight salary–which led to more unintended consequences on the side, namely, the CEOs found themselves with powerful personal incentives to boost short-term stock gains at the risk of long-term health. (Not to mention that they also found themselves now paying a lower tax rate on their dividends than their secretaries paid on their salaries.)

Liberals, however, don’t see the changes in CEO pay or new bank fees as consequences of government interference. The government regulations are well-intended, so you’d have to have bad intentions to be against them, they say.

Conservatives look deeper. Intentions are important, but consequences are ultimately what really matter. Regardless of intent, if these regulations make things worse, they should go. If government interference in the market hurts us, we’re right to want less government interference in the market.

This means Dodd-Frank has to go. This means Sen. Durbin’s and President Obama’s economic solutions will not work. And this means we all need to support conservative candidates in the next few months so that these changes can take place.


[1] http://www.cbsnews.com/8301-503544_162-20128729-503544/dick-durbin-bank-of-america-decision-a-win-for-consumers/

[2] http://www.politico.com/news/stories/1111/67339.html

[3] http://www.epi.org/publication/webfeatures_snapshots_20060621/

[4] http://www.businessweek.com/magazine/content/06_48/b4011079.htm

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