Reason Magazine: A Slippery Slope In the Right Direction?

Reason has an excellent article up about not only why the Hobby Lobby ruling was correct, but also why it didn’t go far enough. This part perfectly encapsulates the Libertarian argument:

A group of politicians cannot legitimately have the power to compel one group of people—employers, taxpayers, or insurers—to pay for things that another group wants. That's immoral, and it violates inalienable rights. Moreover, when government has the power to issue such commands—always backed by force, let us never forget—it sets off a mad interest-group scramble for control of the government machinery—because control is a license to steal. Is it any wonder that people are willing to spend billions of dollars to influence who makes government policy? If people face the alternative of controlling the government or being controlled by it, those who have resources will buy power and influence, even if only in self-defense.

Supporters of the Affordable Care Act (ACA) say the court decision permits the favored employers to make health-care decisions for women. No it doesn't. It only prohibits women, unfortunately in only a narrow set of cases, from being able to use government to force their employers to pay for those decisions. When did we start equating the right to buy contraceptives—which hardly anyone disputes—with the power to compel others to pay? It is demagogic to insist that prohibiting the latter violates the former.

Read the whole thing.

Afterburner with Bill Whittle–The Rule of Lawlessnes

Bill Whittle’s latest Afterburner video is up. In it he details the descent of our government into lawlessness and rule by decree.

 

Update:

Bill kind of skimmed over why Harry Reid will not allow the Senate to pass a budget.The reason Harry Reid has not passed a budget out of the Senate in nearly 4 years can be explained by two words: baseline spending. That is Washington’s way of doing budgets. They take all the services the government is currently providing, assume they will continue providing all of those, add a bit for inflation, say 5% and then if anyone proposes an increase of only 2% they start shrieking about how you’re cutting the budget, or taking credit for budget cutting depending on the optics you want. With no budget, Washington has been spending at the 2009 level which has all the “temporary” stimulus spending baked into it and operating on a series of continuing resolutions. If they were to pass a budget in line with 2007 our deficit would be nearly erased but it won’t happen because the stimulus spending is being used as a giant slush fund that Obama is using to reward his favored constituencies.

More on how baseline budgeting works here.

Words Matter–Obama’s Promises Versus Reality

Watch this video and then tell me again why anyone can seriously consider sending this guy back for a second term.

 

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Is It Time to Mandate SEC Filings by Companies Wishing to Receive Taxpayer Guaranteed Loans?

A Form S-1 is a document a company must file with the Securities and Exchange Commission before it company may offer securities for sale, either equity securities in an IPO or the issuance of public debt. While the online form is only 8 pages long, in reality an S-1 filing can run to hundreds of pages once it is filled out as it must cover several areas of interest to potential investors. This includes, among other things, a description of the company's business, its history, relevant risk factors, the use of the offering proceeds, capitalization and management's discussion and analysis of the business and the company's financial statements. These will include and opinion by an independent auditor as to whether the company's financial statements fairly represent the performance of the business and comply with Generally Accepted Accounting Principals (GAAP) as well as any qualifications to the opinion. 

One of the potential qualifications is what is known as a "going concern" clause which is the audit firm's way of saying "assuming this company remains in business." By inserting that clause in their opinion they are saying that that may not be a safe assumption.  Apparently the auditor's opinion for Solyndra contained this clause and yet the Obama administration pressured the Department of Energy to rush through an approval of a $535 million taxpayer guaranteed loan, despite the Bush administration having turned it down only a couple of months before. There was even concern expressed by DOE analysts that the company was burning cash at such a rate that it would run out by this month. And sure enough, the company filed for bankruptcy, laid off all of its workers and closed its doors on August 31.

If a S-1 was ever filed for this company, I haven't found it and the reason is that the company didn't have to file one because it didn't intend to go public anytime soon. It was entirely funded by venture capital up until the time of the loan.

Yet here I am, an involuntary investor in a bankrupt company, like all the rest of the tax-paying public. I believe that an application for a government loan, guaranteed by the taxpayers, should require the filing of an S-1 or similar disclosure should be made in all cases and that a public comment period of not less than 90 days be mandated before the loan can be made. If the tax-payers can be put on the hook for the loan then they have a right to know what their government is getting them into. The comment period would allow an opprtunity for a crowd-sourced analysis of the company, the soundness of its business case and its financial viability. As long as the government is going to be in the venture capital business and picking winners and losere, and I don't think it should be, this would be a huge leap in transparency and accountability where government and private business intersect. 

Update:  I just went back to Edgar and searched again. I did find an S-1 for Solyndra. I think I probably searched as "Solyndra Corporation" the first time around and it is Solyndra, Inc. Sometimes less is better when searching. In any case, the financials are from pre-revenue 12/31/2006 and 2007 then nine months ended 9/27/2008 and 10/3/2009 and are every bit as ugly as any financial statements I've ever seen, and I do look at a lot of them.  If the company can't get any takers for an IPO, that should be all you need to know about the wisdom of granting a loan. If the market won't touch it, it's sheer idiocy to lend the company money on any terms.

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Will LightSquared be the Next Political Favoritism Scandal?

The Solyndra mess, involving $535 million in taxpayer guaranteed loans to a company that the Obama Administration favored and that just went bankrupt only a year after receiving the loan is dominating the headlines now. However, a new scandal may be brewing.

 

There’s a White House scandal involving favoritism towards a specific company high on President Obama’s political agenda — and it’s not Solyndra.

In this case, the company owner happens to be a big Democratic Party donor. And in the pursuit of giving preference to a specific company, the White House undercut a legendary four-star general and potentially undermined U.S. national security. Adding fuel to the explosive story: at one time President Obama was a personal investor, with $50,000 of his own money.

Are we starting to see a pattern here? Taxpayer funded largesse is being bestowed on politically favored companies whose heads and/or major investors just coincidentally happen to be major Democratic Party donors, whether the business is viable on its own or not, while established companies whose heads just coincidenatlly happen to favor Republicans (and are non-union)  are being raided by armed stormtroopers federal agents over the question of whether a certain kind of wood being used to manufacture guitars was obtained in compliance with the laws of another country.  Yet a competing company, which uses the same wood but just happens to be a union shop and whose head happens to donate money to Democrats is left alone. This doesn't look, feel or smell right.

The Obama investment in LightSquared is referred to in the past tense so he doesn't appear to be in a position to profit from any success the company might have, at least not directly. However, through campaign donations from the executives and investors in some of these companies he seems to be making out rather well indirectly.  

This kind of activity is the very definition of what crony capitalism is and these scandals, which seem to be multiplying and growing, is more worthy of some tinpot dictatorship than the once (and hopefully future) greatest country on Earth.

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