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The recent Wall Street Journal article discussing the pitfalls of raising interests rates in near future was so utterly fully of incorrect information and assumptions, that I felt compelled to call out the author, Mr. Narayana Kocherlakota, for his pomposity. He contends that raising the interest rates — we’re talking .25% here — would “create profound economic risks….given the prevailing economic conditions.” Though Mr. Kocherlakota recognizes the fragility of our current economy, he fails to recognize that Obama’s economic policies and the Fed’s meddling are the chief sources of the malcontent.
So here we have the current president of the Federal Reserve Bank of Minneapolis blathering on and on as if his point of view — that very low interest rates are necessary and good — is a foregone conclusion. But it’s not. Any economist worth his salt knows that the problem all along is one that Mr. Kocherlakota has not even considered, because it is the exact opposition of his world view. Low interest rates have been the problem all along, not the solution. Yet we have this Fed chief who can’t even understand basic economics and has the audacity to pontificate from the Wall Street Journal on a point that is incorrect.
These sustained low interest rates have been harmful to our recovery. The assertion that inflation is merely 0.3% (and therefore well under the “target 2% rate”) is laughable. Ask anyone who has purchased food or paid energy costs in the last several years, and they will tell a different story. Everything is more expensive than it was a few years ago. Compound that with soaring healthcare costs, rising taxes (at all levels of government) and stagnant wages, and the result is an anemic economy.
For Mr. Kocherlakota to suggest that a .25% rate hike, therefore, would “discourage spending” and “create a drag on economic activity” is a slap in the face to all the Americans who diligently saved for their retirement golden years — only to watch their investments and savings shrink because of the non-existent interest rates and loss of Return On Investment (ROI).
These Fed officials are just out of touch with reality. For instance, QE1, 2, and 3 were miserable failures. The open-endedness of floodgate printing left consumers and investors unsure of what to do with their money for a very long time; now that quantitative easing has ended, with no measurable positive results, we have prolonged, and thus weakened, our ability to recover satisfactorily. But officials like Mr. Kocherlakota believe otherwise.
Case-in-point: Mr. Kocherlakota suggests that, “when the public comes to doubt a central bank’s commitment to its goals, the economy can land in a permanent low-interest-rate trap. The central bank is then much less able to fight recessions effectively.” This is patently untrue. The public doubt stems from ineffective policy by the Fed, which creates market uncertainty and a reluctance to invest. Smart Americans know that the best way to fight recessions are curbing government spending, promoting entrepreneurship, and letting the market correct itself without excessive, unconventional tinkering by a central bank. The public doubt is mainly about the Fed leaders — like Mr. Kocherlakota — who fail basic Economics 101.
What Mr. Kocherlakota and many other Fed officials and Washington bureaucrats fail to recognize, is that artificial monetary policies do not create jobs or businesses, which are the greatest source of expanding an economy. This is achieved by a free market and private capital, with minimal government regulation and reduced government spending. Anything else than that, such as prolonged low interest rates, is a recipe for failure.
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Now this is pretty interesting. Last week, a federal district judge ruled in favor of the House of Representatives against the Obama Administration with regarding to Obamacare payments and Congressional appropriations. Specifically, the ruling allow for House to continue their lawsuit which claims that the Executive Branch (via Health and Human Services and the Treasury Department) has overstepped its authority by overspending on Obamacare beyond what was appropriated to them by Congress.
Rollcall has a great overview of what is at stake, how difficult the question it, how it affects the Constitution, and what it says about the Separation of Powers. You should take a few minutes and read it in full, as this type of lawsuit is fairly rare.
The House can pursue some constitutional claims in a lawsuit against the Obama administration over appropriations and implementing the health care overhaul law, a federal district judge ruled Wednesday.
The ruling means Congress has cleared a high procedural hurdle in the separation of powers case, one that usually stops the judiciary from stepping into fights between lawmakers and the executive branch.
The House has legal standing to pursue allegations that the secretaries of Health and Human Services and Treasury are spending $175 billion over the next 10 fiscal years that was not appropriated by Congress, Judge Rosemary M. Collyer of the U.S. District Court in Washington, D.C., wrote in the 43-page ruling.
The House lawsuit asks the court to declare the president acted unconstitutionally in making payments to insurance companies under Section 1402 of the health care overhaul law (PL 111-148, PL 111-152) and to stop the payments.
House Speaker John A. Boehner said the court’s ruling showed that the administration’s “historic overreach can be challenged by the coequal branch of government with the sole power to create or change the law. The House will continue our effort to ensure the separation of powers in our democratic system remains clear, as the Framers intended.”
Wednesday’s ruling does not address the merits of the claims. Collyer acknowledged that the court was taking a rare step, but doing so carefully into a high-profile dispute, so that it wouldn’t give the House standing to file other similar lawsuits.
“Despite its potential political ramifications, this suit remains a plain dispute over a constitutional command, of which the judiciary has long been the ultimate interpreter,” Collyer wrote. “The court is also assured that this decision will open no floodgates, as it is inherently limited by the extraordinary facts of which it was born.”
The dispute focuses on two sections of the health care overhaul law. The administration felt it could make Section 1402 Offset Program payments from the same account as Section 1401 Refundable Tax Credit Program payments. House Republicans say the health care law doesn’t permit that.
The Obama administration, during the fiscal 2014 appropriations process, initially asked Congress for a separate line item for 1402 payments. Congress did not include money for such a line item. During oral arguments in the case in May, Collyer questioned government lawyers about why the administration could ignore Congress and then argue that the House couldn’t sue them.
The administration argued that the House has other options, such as political remedies or passing other legislation, they said.
Jonathan Turley, the attorney for the House, said in a statement that the ruling means that the House “now will be heard on an issue that drives to the very heart of our constitutional system: the control of the legislative branch over the ‘power of the purse.’ We are eager to present the House’s merits arguments to the Court and remain confident that our position will ultimately prevail in establishing the unconstitutional conduct alleged in this lawsuit.”
Turley said the administration had argued that Congress couldn’t seek judicial enforcement of its constitutional status. “The position would have sharply curtailed both the legislative and judicial branches. The Court has now answered that question with a resounding rejection of this extreme position,” he said.
The case at the U.S. District Court for the District of Columbia is U.S. House of Representatives v. Burwell, No. 14-cv-1967.
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It is perfectly fine for an owner of a private business to decline to participate in an event or produce a product if it requires violating one’s religious beliefs. It’s another thing entirely for a person who works for the government — on behalf of the taxpayer and paid by taxpayer funds — to decline to do the job required of them.
Kim Davis is no hero. Her job is to process marriage licenses. If she felt she could no longer consciously do her job, she had an obligation to step aside. No only did she not do that, she barred the rest of her staff from executing their duties as well and ceased issuing all marriage licenses. A reasonable accommodation could have been made for Ms. Davis by allowing her other assistants to process that with which she disagreed. But she chose all-or-nothing, to stop doing her job entirely. For that, she should resign.
Ms. Davis was perfectly free to choose not to process the licenses with which she had disagreement, but in making that choice, the only logical and honorable conclusion was resignation — because she could no longer fulfill the oath she swore to when she was elected.
Not only is her judgment on the matter incorrect, but she is also mucking up the opportunity for those who deserve an honest day in court when they have faced persecution for their beliefs in the private sector.
As stated by Judge Andrew Napolitano, “The free exercise clause guarantees individuals the lawful ability to practice their religion free from government interference. It does not permit those in government to use their offices to deny the rights of others who reject their beliefs. That is the lesson for Kim Davis”.
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This quote from Virgil’s Aeneid sums it up:
God bless America.
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The recently revived debate about birthright citizenship is both ridiculous and baffling. The language of the Constitution is quite clear: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” Commonly known as the “Citizenship Clause”, it is the first sentence of Section 1 of the 14th Amendment, passed in 1868.
This understanding of the 14th Amendment was codified four years later in 1871 in the case, Wong Kim Ark which granted citizenship “to at least some children born of foreigners because they were born on American soil (a concept known as jus soli)”. It is also worth noting that at the time of the Amendment, there was no such thing as illegal immigration, so the legal status of the parents was not an issue; the first law restricting immigration came in 1875.
The Constitution is clear, and there is no way to change it. There should be, and probably is in some way, a law against the budding practice known as “birth tourism”, which allows for a woman to come travel to this country — on a tourist visa — for the sole purpose of having a baby on American soil so that the child can be granted U.S. citizenship. Coming into the country with the intent to subvert the Constitution could be made a crime if it is not already so. For instance, the child will still be granted citizenship, but the parents become criminals — and can never come back to this country.
For those whose parents are here for some time, even if the parents are illegal, the law is clear: their birth in this country confers U.S. citizenship. But if you come here intentionally to subvert the law, the consequences should be so severe, that it makes people think twice about doing it. That should cut down on the amount of rogue circumstances for which people try to gain citizenship with no intent to reside in this country, while simultaneously protecting the 14th Amendment.
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A court ruling on Friday was a victory for those seeking information requests to the White House. A group called “Cause of Action” sued the IRS in 2013 trying to ascertain if the White House ever requested private taxpayer information, especially in light of the IRS scandal.
The requests, however, were declined by the IRS, who cited section 6103 of the tax code, which is the section governing taxpayer confidentiality laws. They argued that “the existence of those requests would be protected by confidentiality laws and couldn’t be released, so there was no reason to make the search.”
The judge however, Amy Berman Jackson, disagreed with their response, noting that “the agency couldn’t use the privacy protection ‘to shield the very misconduct it was enacted to prohibit.’” The IRS was subsequently ordered to turn over any and all recorded requests from the White House seeking taxpayer information. In December 2014, TIGTA acknowledged the existence of about 2500 documents that fit the FOIA request, from “Cause of Action”, asking for communication between the IRS and the White House. It will be interesting to see what these documents reveal.
There’s already been some hints at confidentiality impropriety. Remember that in August 2010, Austan Goolsbee spoke about the Koch Brothers’ tax structure in an anecdote to attack businesses and openly discussed tax information about their business structure that was not publicly available. Additionally, in October 2010, the agency sent a database on 501(c)(4) social-welfare groups containing confidential taxpayer information to the Federal Bureau of Investigation, according to documents obtained by a House panel.
It wouldn’t be a stretch, therefore, to imagine that the White House, the “most transparent administration ever”, also requested or received confidential taxpayer information in collusion with the IRS.
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Ron DeSantis (R., Fla.) chairman of the House Oversight and Government Reform Subcommittee on National Security and Jim Jordan (R., Ohio), chairman of the Subcommittee on Health Care, Benefits, and Administrative Rules, also recently called on President Obama to remove John Koskinen from the head of the IRS. Alternatively, they propose Congressional impeachment if Obama does not due his due diligence and remove Koskinen himself.
DeSantis and Jordan made their case in the pages of the Wall Street Journal and is reprinted below in its entirety, as it provided a thorough summation of Koskinen’s incompetence:
“Internal Revenue Service Commissioner John Koskinen needs to go.
When it was revealed in 2013 that the IRS had targeted conservative groups for exercising their First Amendment rights, President Obama correctly called the policy “inexcusable” and pledged accountability. He even fired the then-acting IRS commissioner because he said it was necessary to have “new leadership that can help restore confidence going forward.”
Unfortunately, Commissioner Koskinen, who took over in the wake of the IRS targeting scandal, has failed the American people by frustrating Congress’s attempts to ascertain the truth. A taxpayer would never get away with treating an IRS audit the way that IRS officials have treated the congressional investigation. Civil officers like Mr. Koskinen have historically been held to a higher standard than private citizens because they have fiduciary obligations to the public. The IRS and Mr. Koskinen have breached these basic fiduciary duties:
• Destruction of evidence. Lois Lerner, at the time the director of the IRS’s exempt-organizations unit, invoked the Fifth Amendment on May 22, 2013, when appearing before Congress; her refusal to testify put a premium on obtaining and reviewing her email communications. On the same day the IRS’s chief technology officer issued a preservation order that instructed IRS employees “not to destroy/wipe/reuse any of the existing backup tapes for email, or archiving of other information from IRS personal computers.”
Several weeks later, on Aug. 2, the House Oversight Committee issued its first subpoena for IRS documents, including all of Ms. Lerner’s emails. On Feb. 2, 2014, Kate Duval, the IRS commissioner’s counsel, identified a gap in the Lerner emails that were being collected. Days later, Ms. Duval learned that the gap had been caused in 2011 when the hard drive of Ms. Lerner’s computer crashed.
Despite all this—an internal IRS preservation order, a congressional subpoena, and knowledge about Ms. Lerner’s hard-drive and email problems—the Treasury inspector general for tax administration discovered that the agency on March 4, 2014, erased 422 backup tapes containing as many as 24,000 emails. (Congress learned of the discovery only last month.)
Ms. Duval has since left the IRS and now works at the State Department, where she is responsible for vetting Hillary Clinton’s emails sought by congressional investigations of the Benghazi attacks.
• Failure to inform Congress. Mr. Koskinen was made aware of the problems associated with Ms. Lerner’s emails the same month Ms. Duval discovered the gap. Yet the IRS withheld the information from Congress for four months, until June 13, 2014, when the agency used a Friday news dump to admit—on page seven of the third attachment to a letter sent to the Senate Finance Committee—that it had lost many of Ms. Lerner’s emails.
During that four-month delay, Mr. Koskinen testified before Congress under oath four times. On March 26, 2014, he appeared before the Oversight Committee and pledged that the IRS would produce all of Ms. Lerner’s emails, not mentioning that the IRS already knew of the problems with her emails and hard drive. Mr. Koskinen deliberately kept Congress in the dark. Based on testimony received by the committee, we now know that the IRS appears to have spent the four months working with the Obama administration to fine-tune talking points to mitigate the fallout.
• False testimony before Congress. Mr. Koskinen made statements to Congress that were categorically false. Of the more than 1,000 computer backup tapes discovered by the IRS inspector general, approximately 700 hadn’t been erased and contained relevant information. But Mr. Koskinen testified he had “confirmed” that all of the tapes were unrecoverable.
He also said: “We’ve gone to great lengths, spent a significant amount of money trying to make sure that there is no email that is required that has not been produced.” In reality, the inspector general found that Mr. Koskinen’s team failed to search several potential sources for Ms. Lerner’s emails, including the email server, her BlackBerry and the Martinsburg, W.Va., storage facility that housed the backup tapes.
The 700 intact backup tapes the inspector general recovered were found within 15 days of the IRS’s informing Congress that they were not recoverable. Employees from the inspector general’s office simply drove to Martinsburg and asked for the tapes. It turns out that the IRS had never even asked whether the tapes existed.
Three weeks after the 422 other backup tapes were destroyed by the IRS, Mr. Koskinen told the committee that he would produce “all” Lerner documents. This statement was clearly false—you can’t give Congress “all” of the material if you know that you have already destroyed some of it.
• Failure to correct the record. After his false statements to Congress under oath, Mr. Koskinen refused to amend them when given the opportunity at a public hearing earlier this year. If a lawyer makes a false statement to a court, he has a duty to correct it. Civil officers like Commissioner Koskinen have a duty to the American people to revise their testimony when it contains inaccuracies.
• Failure to reform the IRS to protect First Amendment rights. Mr. Koskinen hasn’t acted on the president’s May 2013 promise to “put in place new safeguards to make sure this kind of behavior cannot happen again.” A Government Accountability Office report released last week found that the IRS continues to lack the controls necessary to prevent unfair treatment of nonprofit groups on the basis of an “organization’s religious, educational, political, or other views.” In other words, the targeting of conservative groups may very well continue.
If the president doesn’t remove Mr. Koskinen from his post, then Congress should remove him through impeachment. The impeachment power is a political check that, as Alexander Hamilton wrote in Federalist No. 65 in 1788, protects the public against “the abuse or violation of some public trust.”
Supreme Court Justice Joseph Story echoed Hamilton in 1833 when he distinguished impeachable offenses from criminal offenses, noting that they “are aptly termed political offenses, growing out of personal misconduct or gross neglect, or usurpation, or habitual disregard for the public interests . . . They must be examined upon very broad and comprehensive principles of public policy and duty.”
John Koskinen has violated the public trust, breached his fiduciary obligations and demonstrated his unfitness to serve. Mr. President, it’s time for Commissioner Koskinen to go. If you don’t act, we will.”
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Last month, Rep. Jason Chaffetz (R. Utah) wrote a letter regarding John Koskinen, the commissioner of the IRS, asking President Obama to remove him from his post. As the IRS is a part of the Department of the Treasury, it falls under the authority of Executive Branch.
Chaffetz rightly calls out Koskinen for “obstruction” with regard to the various congressional investigations, which have revealed bungled IRS responses to repeated inquiries. At the time of his letter in late July, it had recently been revealed that IRS workers destroyed Lerner’s backup tapes from 2010-2011, losing 24,000 emails in the processes.
Chaffetz has it right. Even now, a month after calling on Obama to dismiss Koskinen, there have been even more revelations of IRS misconduct. This include that fact that 10 groups have still yet to be approved for tax-exempt status — with some waiting as long as 5 years — due to a “backlog of cases”. Even more egregiously, the IRS only revealed last week during court proceedings that Lois Lerner used a second, private email account with the alias “Toby Miles” to conduct IRS business (on top of her IRS email and another private email account). The fact that after years into the investigations, only last week this information was disclosed to the public shows an unrepentant IRS.
If Obama is unwilling to actually dismiss Koskinen from his deplorable actions, it shows he lacks the fortitude to fix the critical problems at the IRS. In fact, it proves that he really is the root of the problem.
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The Washington Times has the story on this new information being admitted to by the IRS — Lois Lerner used another separate personal email account with an alias, “Toby Miles”, to conduct professional business. This now makes three email accounts used by Lerner, the other two being her work email and another personal email that was previously known.
After all this time, to only now come clean about a third email account is egregious. The IRS lawyer, Geoffrey Klimas, tried to deflect the situation by arguing “that the IRS had previously hinted there may be other personal email accounts, pointing back to a footnote in a letter attached to a June 27, 2014, brief that mentioned “documents located on her personal home computer and email on her personal email account.”
However, that wording was also altered on Monday — evidencing backtracking and cover-up — referring now to her ‘personal home computer and email on her personal email’ account(s).” So the IRS deliberately retained the information the Lerner had a second personal email account, by which she used an alias. The alias, by the way, is her dog’s name.
The Times also reports that “Curiously, the Ways and Means Committee criminal referral mentioned the Toby Miles email address, identified as tobomatic@msn.com. The address came to light because it was included on an email that also hadMs. Lerner’s official account on the chain of recipients….at the time of the referral in April 2014, the committee linked the Toby Miles address to Ms. Lerner’s husband, Michael R. Miles, but said, “The source of the name ‘Toby‘ is not known.”
At no time did Lerner, or anyone else at the IRS, admit that the “Toby Miles” email account belonged instead to Lois Lerner. Nor has that email address been searched.
Lerner, of course is not the first, or second, or third administration member to use extra or secret email accounts, with or without aliases. Former Secretary of State Hillary Rodham Clinton and her top aides, the White House’s top science adviser, top Environmental Protection Agency officials and now the IRS, have all done this. All part of the “most transparent administration ever.”
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As the Stock Market is swirling around today, I am reminded of an incident that began this day in 1982 and spanned several years; it involved illegal trading schemes, inside tips, and money. History.com has a good synopsis:
“Martin Siegel meets Ivan Boesky at the Harvard Club in New York City to discuss his mounting financial pressures. Arbitrageur Boesky offered Siegel, a mergers-and-acquisitions executive at Kidder, Peabody & Co., a job, but Siegel, who was looking for some kind of consulting arrangement, declined. Boesky then suggested that if Siegel would supply him with early inside information on upcoming mergers there would be something in it for him.
In January 1983, although little information had been exchanged, Boesky sent a courier with a secret code and a briefcase containing $150,000 in $100 bills to be delivered to Siegel at the Plaza Hotel.
Over the next couple of years, Siegel passed inside information to Boesky on several occasions. With Siegel’s inside tips, Boesky made $28 million dollars investing in Carnation stock before its takeover. But his success began to fuel investigative inquiries by both the press and the Securities and Exchange Commission. Rumors that Siegel and Kidder, Peabody & Co. were involved in illegal activities began floating around.
Despite the pressure, Siegel and Boesky met ata deliin January 1985, where Siegel demanded $400,000. This time, the cash drop-off was made at a phone booth. Siegel, who was apprehensive about his relationship with Boesky, decided to put an end to it after he had received his money. Still, he continued to trade inside information with other Wall Street executives.
In 1986, the illegal schemes, which by then included many of the biggest traders in the country, came crashing down. Arrests were made up and down Wall Street, and Boesky and Michael Milken, the junk bond king charged with violating federal securities laws, were no exception.
Siegel turned out to be one of the few cooperative witnesses for the government and virtually the only one who showed remorse for his role in the fraud, causing him to be ostracized on Wall Street. Nevertheless, he did fare better than the others: Milken received a 10-year sentence and Boesky received 3 years,but Siegel was only required to return the $9 million he had obtained illegally. The entire incident came to symbolize the era of unfettered greed on Wall Street in the mid-1980s.”
The big stock market crash, “Black Monday”, happened on October 19, 1987. Much of the Wall Street schemes noted above contributed greatly to the bull market which began in 1982, combined with low interest rates, mergers, and more. The fervor reached a crescendo in spectacular trading years of 1986-1987, before the stock market crashed. The Dow lost more than 22% of its value in the crash of 1987.
