By Arnold Kling
From the Washington Post
1. In Finance
The Federal Reserve would consider reopening its program to support the mortgage market if interest rates spiked or the economy showed new weakness, Federal Reserve Bank of New York President William C. Dudley said in two new interviews.
Rates on 30-year, fixed-rate mortgages are 5 percent. The market wants those rates to be higher. Down the road, the market probably will want those rates to be much, much higher. If so, the ultimate lenders are going to take huge losses, as the interest rates they pay to keep these mortgages in portfolio will exceed 5 percent.
Who will bear these losses? As taxpayers, we will.
For the second budget in a row, President Obama has proposed to reduce the tax deductions on donations by the wealthy, making it about 10 percent more costly for them to give to charity — and gaining the federal government about $300 billion in revenue over 10 years.
To me, this is absolutely the most Obaminable tax proposal. Stealing from charities to give to the government. I favor doing exactly the opposite–making it more attractive for more people to give to charity rather than pay taxes.
From the lead editorial:
Most candidates for local office in Montgomery County covet the endorsement of the county teachers union more than any other, and all of them know the drill: Appear at union events, fill out the union questionnaire, submit to the union interview. The union, representing 11,000 teachers, helpfully provides a road map to candidates seeking its blessing, including 11 criteria spelled out in painstaking detail online. Just one thing is missing from this handy guide: Candidates who receive the union’s stamp of approval are also then expected to pay.
…In the latest elections for the Montgomery County Council, in 2006, most candidates on the union-approved (and trademarked) “Apple Ballot” coughed up the maximum contribution allowed by state law, $6,000, to a PAC run by the Montgomery County Education Association, as the teachers union is known. Union-backed candidates for the Board of Education also paid handsomely. Supposedly, these funds covered the cost of the union’s mailings to constituents and other activities on behalf of its anointed candidates — although there is no real accounting on a campaign-by-campaign basis. In theory, these contributions are voluntary. In fact, several sources told us that the MCEA’s chief political strategist, Jon Gerson, made it clear that he expected candidates, once endorsed, to pay what they “owed” for the union’s campaign on their behalf. One candidate, asked to explain the decision to pay, answered concisely: “Fear.”
I live in Montgomery County, which is why I know what a one-party state feels like. It is nominally the Democratic Party that is in charge, but in reality party affiliation does not matter. The teachers’ union is in total control here.
What links these three stories is that they all involve state power infringing on civil society.