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Kevin Hassett comments on the Chrysler deal.
I feel like I have seen this bad gangster movie before.
In the opening scene, a naive investor buys some bonds, explaining to his staff that they are a sound investment secured by hard assets. Even if the company goes under, the investor explains, bond investors stand to get about 80 percent of their money back.
The next day, a government official calls and offers to buy up the bonds at 33 cents on the dollar, while giving controlling interest in the company to the labor unions. The investor refuses. That night, a man shows up at his home.
“We’re not saying anything bad is going to happen to you,” the tough says, “but the big boss is going to be very disappointed in you if you don’t take the deal. By the way, how’s your little girl? Is she still going to school down on Federal Street?” The investor caves.
The evolution of the Chrysler LLC bankruptcy seemed almost as bad. The Obama administration brokered a deal that gave labor unions a 55 percent equity stake in Chrysler, putting their interests ahead of the secured interests of bondholders. …
Thomas Sowell on the Supreme pick.
Justice David Souter’s retirement from the Supreme Court presents President Barack Obama with his first opportunity to appoint someone to the High Court. People who are speculating about whether the next nominee will be a woman, a Hispanic or whatever, are missing the point.
That we are discussing the next Supreme Court justice in terms of group “representation” is a sign of how far we have already strayed from the purpose of law and the weighty responsibility of appointing someone to sit for life on the highest court in the land.
That President Obama has made “empathy” with certain groups one of his criteria for choosing a Supreme Court nominee is a dangerous sign of how much further the Supreme Court may be pushed away from the rule of law and toward even more arbitrary judicial edicts to advance the agenda of the left and set it in legal concrete, immune from the democratic process.
Would you want to go into court to appear before a judge with “empathy” for groups A, B and C, if you were a member of groups X, Y or Z? Nothing could be further from the rule of law. That would be bad news, even in a traffic court, much less in a court that has the last word on your rights under the Constitution of the United States. …
Stuart Taylor has Supreme thoughts.
… With such a big Democratic majority in the Senate, Obama could get just about anyone confirmed easily. But the Republicans could bleed him some politically if he made an exceptionally controversial pick such as Sonia Sotomayor, a federal appeals court judge based in New York.
Obama would probably prefer to make a truly outstanding choice, and if possible a consensus choice. He will not see this as some exercise in political gamesmanship. He may also want to break the boring pattern of staffing the Supreme Court with cloistered appellate judges. He said during the campaign that he liked the Earl Warren model — a big-time politician who can lead the court by force of personality and convictions.
Obama has said he wants a Supreme Court justice to have empathy for the powerless; he voted against Justices John Roberts and Samuel Alito, accusing them of siding with the powerful. Obama is, of course, pro-choice on abortion and pro-civil liberties. But he applauded a conservative Second Amendment decision last June and assailed a liberal decision striking down the death penalty for raping a child. Both stances were widely seen as more politics than principle, but he may want to keep sounding the same political notes on the judicial front.
Presidential war powers seems an especially interesting issue area to watch. Now that he’s president — and taking some of the same positions that George W. Bush took about his power to detain suspected terrorists without criminal charges — Obama might like to reverse the 5-4 majority (which included Souter) that kept ruling against Bush in the Guantanamo cases. …
Robert Samuelson says the administration’s bias against oil and gas is a grave error.
… Contrary to popular wisdom, the United States still has huge oil and natural-gas resources. The outer continental shelf (OCS), including parts that have been off limits to drilling since the early 1980s, may contain much natural gas and 86 billion barrels of oil, about four times today’s “proven” U.S. reserves. The U.S. Geological Survey recently estimated that the Bakken Formation in North Dakota and Montana may hold 3.65 billion barrels, about 22 times a 1995 estimate. And then there’s upwards of 2 trillion barrels of oil shale, concentrated in Colorado. If 800 billion barrels were recoverable, that’s triple Saudi Arabia’s proven reserves.
None of these sources, of course, will quickly provide much oil or natural gas. Projects take 5, 10, 15 years. The OCS estimates are just that. The oil and gas must still be located—a costly, chancy and time-consuming process. Extracting oil from shale (in effect, a rock) requires heating the shale and poses major environmental problems. Its economic viability remains uncertain. But added oil from any of these sources could ultimately diminish dependence on imports, now almost 60 percent of U.S. consumption, while the exploration and development process would immediately boost high-wage jobs (geologists, petroleum engineers, roustabouts, steelworkers).
Though straightforward, this logic mostly eludes the Obama administration, which is fixated on “green jobs,” and wind and solar energy. Championing clean fuels has become a political set piece. On Earth Day (April 22), the president visited an Iowa factory that builds towers for wind turbines. “It’s time for us to [begin] a new era of energy exploration in America,” he said. “We can remain the world’s leading importer of oil, or we can become the world’s leading exporter of clean energy.”
The president is lauded as a great educator; in this case, he provided much miseducation. He implied that there’s a choice between promoting renewables and relying on oil. Actually, the two are mostly disconnected. …
What do the NBA and the NFL owe to colleges and universities? According to Allen Barra, a lot.
… There are many reasons for the rise of the NFL and NBA over the past half-century, but one of the most important is seldom discussed: They don’t pay for the development of their players. Though MLB does draw some talent from the nation’s top collegiate programs, the major percentage of their players are brought up through an extensive minor-league system.
Who pays for NFL recruits? Many writers who have analyzed the economics of college football believe that between 70% and 75% of athletic departments lose money. Murray Sperber, author of “Beer and Circus: How Big-Time College Sports is Crippling Undergraduate Education,” believes the number is higher than that. “Almost all athletic departments lose money if they do their books honestly. The NCAA’s latest accounting report, doing the books more honestly than ever before, supports my belief.” This means that much of the bill for maintaining football and basketball programs comes from alumni and even taxpayers. …
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