Murray discusses cronyism problem with Wall Street Journal

Charles Murray discusses with Mary Kissel of the Wall Street Journal the many problems created by rampant cronyism in the American economy.

KISSEL: You’re blaming the 1 percent, why?

MURRAY: Yeah, to a great extent. I’ll give you some examples: the 25,000 square foot homes, the private jets, but more than that, the sense that a lot of Americans have that the game is rigged now. And the problem is, a lot of that is true.

KISSEL: But Charles, we’re a capitalist society, what’s rigged? I mean, if you make a lot of money, what is wrong with building a big home or owning a private jet? We would support that on the editorial page.

MURRAY: There’s a couple of things, one is that it’s an American tradition that you don’t get too big for your britches once you get rich.

KISSEL: I thought that was a Social Democratic tradition in Britain or Australia. The tall poppy syndrome.

MURRAY: No, that was very capitalist, that you were one of the people once you got successful. That’s not nostalgia, that’s true. Back in the 1960s or 50s, when I was growing up, the executives of the Maytag company, in the town where I lived, wouldn’t buy Cadillacs, that was getting too fancy, too flamboyant.

There’s another thing that’s going on, Mary, which is even bigger: capitalism in bed with the government. Big time. The American people look at the way people make zillions of bucks because they can get the regulations they want to, because they get the government to support their technology. They see that going on, plus the crony capitalism. And the number of these capitalists are enthusiastically in favor of real competition is depressingly small.

KISSEL: Alright, but when the Democrats say the game is rigged, I’m thinking of Massachusetts Senator Liz Warren, this is a theme she uses all the time. She’s not talking about less regulation, she’s talking about more.

MURRAY: Yeah, yeah. I have no truck with the Warrens of the world. I’m actually speaking as someone who loves competition and free enterprise. And I’m saying to the people who are supposedly on my side, you guys better practice what you preach. Because a lot of you aren’t.

KISSEL: Do you think that the Occupy Wall Street movement on the left, and the Tea Party on the right are both reactions to that same thing, that kind of cronyism?

MURRAY: It’s the same thing, there is a new upper class no that is increasingly really happy being a new upper class. They have left behind the American tradition of saying hey, we’re just folks. They are, actually, rather enjoying the position. It’s Un-American, Mary.

Here’s a shocker: Politics likely played a larger role than science in boosting a solar company

Lachlan Markay of the Washington Free Beacon digs into the details of a politically motivated “green energy” project involving the Obama adminstration’s U.S. Energy Department.

The Department of Energy ignored warnings by internal solar experts when it subsidized a solar company backed by a major Democratic donor that went bankrupt in 2012, according to a report from federal watchdogs.

Abound Solar filed for Chapter 7 bankruptcy protection in June 2012 and laid off 125 employees. By that time it had drawn on almost $70 million of its $400 million DOE loan guarantee.

According to a DOE inspector general report released on Thursday, market conditions led to Abound’s collapse, but the department, while aware of those conditions, ignored the advice of its own experts when it continued financing the company in 2011.

“We found that [DOE’s] internal solar expert had previously expressed concerns to the program regarding deficiencies in Abound’s quality control,” the IG’s office wrote in its report.

Those deficiencies were apparent mere months after DOE approved support for the company, in December 2010. Credit rating service Fitch at the time called Abound a “highly speculative” investment.

Initial quality control problems forced Abound to make production changes that hindered its loan repayment ability. DOE suspended loan payments in February 2011, but despite warnings from its own solar industry expert, restarted those payments two months later.

New emails shed more light on IRS scandal

Mark Tapscott of the Washington Examiner analyzes the latest revelations in the scandal surrounding IRS efforts targeting conservative and Tea Party groups.

Congressional and media attention in the IRS scandal thus far has focused mainly on the federal tax agency and its former exempt organizations director, Lois Lerner.

But Judicial Watch, the non-profit government watchdog, has obtained email correspondence between Lerner and key U.S. Department of Justice officials about criminal prosecution of conservative and Tea Party nonprofits illegally targeted for harassment.

That would be the same Justice Department run by Attorney General Eric Holder, and that employs Barbara Bosserman, one of President Obama’s loyal, long-time campaign contributors.

Bosserman has a major role in the Justice Department’s “investigation” of the IRS scandal that Obama told the nation found “not even a smidgen of corruption” at the IRS.

The emails uncovered by Judicial Watch suggest the reason Holder’s department found nothing wrong at IRS is the fact DOJ was assisting the IRS in its illegal activities.

America’s history of corporate welfare

Kevin Williamson promotes for National Review Online readers a new book detailing America’s troubled history with corporate welfare.

Government “investments” have had a poor showing of late. President Barack Obama, convinced as ever that our economy can run on good intentions rather than hydrocarbons, got sold a bill of goods by such corporate rent-seekers as Solyndra and Tesla. And the federal government cannot even get the hydrocarbon-related businesses right, either: Our alleged “investment” in General Motors cost taxpayers many billions of dollars and made them partners in an incompetent and negligent operation that contributed to the deaths of at least 13 people who perished in accidents related to faulty switches in GM vehicles. As investment gurus go, Barack Obama isn’t exactly E. F. Hutton.

But our current feckless chief executive is not the worst offender on this front, and probably not even in the top ten, a point of more than merely historical interest argued at some length in Burton and Anita Folsom’s Uncle Sam Can’t Count: A History of Failed Government Investments, from Beaver Pelts to Green Energy, a terrific and very readable book published earlier this week. The Folsoms, who both teach at Hillsdale College, start setting ’em up and knocking ’em down with George Washington, a great president but a pretty lousy practitioner of beaver-pelt protectionism. The rogues’ gallery includes everything from federally supported steamship operations and railroads to Herbert Hoover’s Reconstruction Finance Corporation, the corrupt favor factory that gave birth to the Small Business Administration and Fannie Mae, and sundry 21st-century variations on the 18th-century mercantilist theme.

This weekend on Carolina Journal Radio

Obamacare supporters claimed victory once official health insurance exchange enrollment numbers topped 7 million nationwide. Katherine Restrepo analyzes what those numbers really mean during the next edition of Carolina Journal Radio.

Sarah Curry discusses North Carolina’s unfunded liability for health and pension plans that benefit retired government workers. Lt. Gov. Dan Forest describes the work of the newly revived N.C. Energy Policy Council.

Tim Boyum, host of Time Warner Cable News’ “Capital Tonight,” outlines top races and issues his program will be covering during the 2014 election season. And author William Eggars explains key themes from the book The Solution Revolution.

Wake County teacher loses

According to the Wake County Schools blog,

As of April 9, 2014, more than 600 teachers have left their jobs since the beginning of the school year on July 1, 2013, an increase of 41 percent over the same period last year.

Here is some perspective: According to the N.C. Department of Public Instruction, Wake County employed 10,331 teachers this year.  Moreover, 1,170 teachers left their Wake County school last year, although around three hundred of those stayed in education.

At this point, Wake County school officials should examine the district and school conditions that led to the rise, unless a similar phenomenon is occurring in other school districts.  If Wake is not alone, then state legislators will have to take action during the session that begins next month.

“Sustainability” crusaders at UNCW want every student to fork over some money

Among the current fads on American college campuses is “sustainability.” As we read in this piece, students at UNCW want the school to impose an additional $5 fee on all students to create a fund to be used for various “sustainability” programs.

If they think “sustainability” so important, why don’t the students work to raise the money through voluntary means? It’s telling that their first thought was to force every student to pay through a tax rather than trying to persuade them to contribute voluntarily.

Charlotte Observer editorial offers its own “education in politics”

I am not surprised that the Charlotte Observer editorial staff is attacking the Republican chairs of the North Carolina Educator Effectiveness and Compensation Task Force, Rep. Rob Bryan and Sen. Jerry Tillman.

I am also not surprised that the editorial staff dedicated so much ink praising Democratic task force member Rep. Tricia Cotham, a legislator who I have always respected despite our ideological differences.

But I have to ask.  What, exactly, were Rep. Cotham’s contributions to the task force?

Do we have a record of email exchanges between Cotham and the co-chairs of the task force?  In other words, the editors assume that she was an active participant, but I see no evidence of that.

I do see evidence that Cotham used the task force as her personal soapbox.  Take her comment from the final meeting of the task force, for example:

It comes down to a few simple questions: Do we value children? Do we value teachers? Do we value education as an economic driver?

How did this inane statement advance the work of the task force or even contribute to the debate about teacher compensation?  It didn’t.  It was, in the words of Observer editors, “an education in politics.”

And let’s talk about the obvious.  The task force conducted four meetings, and the fourth one was a discussion of the final report.  Given that constraint, why would anyone expect a final report that addresses the mind-boggling complexities of teacher compensation?  As I mentioned in my weekly newsletter, had the final recommendations offered the specific policy recommendations desired by some members of the task force, they would have complained that there was insufficient testimony to warrant detailed recommendations. And they would have been correct!

After all, teacher compensation does not exist in a vacuum.  For one, it is situated within the local, state, and national labor markets.  Moreover, teacher compensation decisions are contingent on the amount of resources obtained from taxpayers, as well as the allocation of those resources to thousands of state government operations.  Many other functions receive a slice of the state budget pie, a point that is lost on those advocating huge increases in teacher pay.

Finally, let’s talk about this raising teacher pay to the “national average” business.  Observer editors think it is a cut and dry issue.  It isn’t.  Legislators could spend days examining pertinent issues surrounding the “national average,” such as cost-of-living, benefits, and the role of federal and local governments.