The Federal Government Should Have Zero Involvement in Housing

I debate my statist buddy Christian Weller on Larry Kudlow's show.

Is France the Best Place in the World to Live?

A new survey from International Living says that France has the highest quality of life, followed by Australia and Switzerland. The United States, meanwhile, is in seventh place, behind nations such as Germany, New Zealand, and Luxembourg:

To produce this annual Index we consider nine categories: Cost of Living, Culture and Leisure, Economy, Environment, Freedom, Health, Infrastructure, Safety and Risk, and Climate. This involves a lot of number crunching from "official" sources, including government websites, the World Health Organization, and The Economist, to name but a few. We also take into account what our editors from all over the world have to say about our findings.

1. FRANCE
2. AUSTRALIA
3. SWITZERLAND
4. GERMANY
5. NEW ZEALAND
6. LUXEMBOURG
7. UNITED STATES
8. BELGIUM
9. CANADA
10. ITALY

While I enjoy hammering French socialists, this does not mean I disagree with the list. International Living's Index basically measures good places to live for people who already have money. France is a very nice country to visit, and would be a very nice place for a rich person to live depending on one's preferences for food, weather, and culture. Personally, I'd go for someplace warm and sunny, such as the Cayman Islands (which only ranks 54th out of 194 options). There are plenty of interesting details in the comprehensive table, including Liechtenstein being the only place to get a perfect score in the economy category. Somalia was the worst overall country. The biggest surprise, at least to me, is that Singapore was ranked 70th. Seems rather low since a number of rich people are choosing to become Singapore residents.

The Real-World Version of Atlas Shrugged

John Stossel's show tomorrow on Fox Business News will discuss how modern events are eerily similar to what happened in Ayn Rand's Atlas Shrugged. Writing about the show in his column, Stossel asks which political figure from today would be akin to the evil Wesley Mouch in the book. That's a challenging question. During the Clinton years, Ira Magaziner or Robert Reich would have been obvious choices. But who is the statist Rasputin of the modern era? You can vote at this link. Geithner, Frank, and Obama currently lead the voting:

Even though Rand published "Atlas" in 1957, her descriptions of intrusive and bloated government read like today's news. The "Preservation of Livelihood Law" and "Equalization of Opportunity Law" could be Nancy Pelosi's or Harry Reid's work. The novel's chief villain is Wesley Mouch, a bureaucrat who cripples the economy with endless regulations. This sounds familiar. Reason magazine reports that "as he looks around Washington these days," Rep. Paul Ryan "can't help but think he's seeing a lot of Wesley Mouch". Me, too. I also saw a lot of him under George W. Bush. So I'm conducting this unscientific poll: Who is our Wesley Mouch? Hank Paulson? Tim Geithner? Barney Frank? You can vote here. Personally, I think Chris Dodd's ridiculous financial proposals ought to win him the honor. But he isn't among the choices on Fox's list. As I write this, Geithner, President Obama and Barney Frank lead the voting. ...Rand brings out ferocious hatred in some people. ...Had today's bureaucrats been in charge decades ago, they would have banned things like aspirin, cars and airplanes. Sadly, they are in charge now. That makes the "Atlas" message important today. Although Rand idolizes businessman in the abstract, "Atlas Shrugged" makes clear that she (like Adam Smith) understood that they are not natural friends of free markets. They are often first in line for privileges bestowed by the state. That's called "crony capitalism," and that's what Orren Boyle practices in "Atlas."

More Senseless and Overbearing Government

Any bureaucrat involved in a stunt like this deserves to be fired.

To think, these are the folks we're expecting to keep us safe from terrorism!

H&R Block and the IRS: An Unholy Alliance to Ransack Taxpayers

The late George Stigler, winner of the Nobel Prize in economics, is famous in part because of his work on "regulatory capture," which occurs when interest groups use the coercive power of government to thwart competition and undeservedly line their own pockets. A perfect (and distasteful) example of this can be found in today's Washington Post, which reports that the IRS plans to impose new regulations dictating who can prepare tax returns. Not surprisingly, the new rules have the support of big tax preparation shops such as H&R Block and Jackson Hewitt, which see this as an opportunity to squeeze smaller competitors out of the market. The IRS and the big firms claim more regulations are needed to protect consumers from shoddy work, but this is the usual rationale for licensing laws and other government-imposed barriers to entry and the Institute for Justice repeatedly has shown such rules are designed to benefit insiders rather than consumers. Tax preparers do make many mistakes, to be sure, but that is a reflection of a nightmarish tax code, and the annual tax test conducted by Money magazine showed that even the most-skilled professionals - such as CPAs, tax lawyers, and enrolled agents - were unable to figure out how to correctly fill out a hypothetical family's tax return. But since the IRS routinely makes major mistakes as well, perhaps the moral of the story is that we need fundamental tax reform, not IRS rules to create a cartel for the benefit of H&R Block and other big firms. Would any of this be an issue if we had a flat tax or national sales tax?

The Internal Revenue Service plans to test, register and screen people who get paid to prepare tax returns, stepping into a virtually unregulated business on which millions of Americans depend for crucial financial services. ...the moves could increase the cost of having tax returns prepared. ...Starting with the 2011 tax season, the IRS plans to require paid preparers to register with the agency. ...The new testing and education standards will exempt certified public accountants, lawyers, and tax practitioners known as "enrolled agents," who are cleared to represent taxpayers in dealing with the IRS... Tax prep giants H&R Block and Jackson Hewitt expressed support for the requirements announced Monday. Under the new rules, H&R Block "won't be competing against people who aren't regulated and don't have the same standards as we do," said Kathryn Fulton, senior vice president for government relations. ...Citing a gap in the agency's plan, Fulton said the IRS should impose the same rules on unpaid preparers of tax returns. ...In field tests, the IRS noted Monday, tax-return preparers often gave bad advice. In a 2006 study in which employees of the Government Accountability Office posed as taxpayers and visited outlets of tax prep chains, all 19 preparers made mistakes, the IRS reported. ...It is unclear how much of the blame rests with the tax code's confusing nature, a perennial target of politicians' criticism. Do regulated professionals such as CPAs perform better than their unregulated counterparts? The IRS commissioner said the agency does not have the data to answer that question.

Higher Tax Rates Causing More Problems in London

With Barack Obama planning big tax rate increases in America, it's useful to see how that policy is working in the United Kingdom. According to the Mayor of London, the answer is not very encouraging. Many successful entrepreneurs and investors are fleeing for other nations, and now companies are joining the rush to the exit. The Daily Telegraph reports:

Boris Johnson, the London Mayor, has suggested that he is deeply troubled that Goldman Sachs is considering moving parts of its business out of Britain following the Government's 50pc tax on bonuses. "I am extremely anxious about rumours in the City that seem to confirm that the recent knee-jerk and ill-thought-out tax grab by the Government to punish bankers is causing some of our most important institutions to consider their options," Mr Johnson told The Daily Telegraph. "This should act as a strong wake-up call to our leaders that their policies could seriously threaten our competitiveness with long-term consequences for both London and the UK economy," said the mayor amid growing speculation that London could face a mass exodus of City workers in the wake of the bonus tax. Goldman Sachs is the latest investment bank to review its London operations, joining broker Tullett Prebon which told its staff it would give them the option of moving overseas to avoid the tax. ...Goldman, which paid £1.1bn in corporation tax last year, has launched an internal review of London operations which could see its proprietary trading desk and foreign exchange business relocating to Switzerland or Dubai.

You and I Pay while Fannie and Freddie Play

The Wall Street Journal has more details about the sordid redistribution of our money to the insiders at Fannie Mae and Freddie mac:

...there's still some ugly 2009 business to report: To wit, the Treasury's Christmas Eve taxpayer massacre lifting the $400 billion cap on potential losses for Fannie Mae and Freddie Mac as well as the limits on what the failed companies can borrow. The Treasury is hoping no one notices, and no wonder. Taxpayers are continuing to buy senior preferred stock in the two firms to cover their growing losses—a combined $111 billion so far. When Treasury first bailed them out in September 2008, Congress put a $200 billion limit ($100 billion each) on federal assistance. Last year, the Treasury raised the potential commitment to $400 billion. Now the limit on taxpayer exposure is, well, who knows? ...The loss cap is being lifted because the government has directed both companies to pursue money-losing strategies by modifying mortgages to prevent foreclosures. Most of their losses are still coming from subprime and Alt-A mortgage bets made during the boom, but Fannie reported last quarter that loan modifications resulted in $7.7 billion in losses, up from $2.2 billion the previous quarter. The government wants taxpayers to think that these are profit-seeking companies being nursed back to health, like AIG. But at least AIG is trying to make money. Fan and Fred are now designed to lose money, transferring wealth from renters and homeowners to overextended borrowers. Even better for the political class, much of this is being done off the government books. The White House budget office still doesn't fully account for Fannie and Freddie's spending as federal outlays, though Washington controls the companies. Nor does it include as part of the national debt the $5 trillion in mortgages—half the market—that the companies either own or guarantee. ...This subterfuge also explains the Christmas Eve timing. After December 31, Team Obama would have needed the consent of Congress to raise the taxpayer exposure beyond $400 billion. By law, negative net worth at the companies forces them into "receivership," which means they have to be wound down. Unlimited bailouts will now allow the Treasury to keep them in conservatorship, which means they can help to conserve the Democratic majority in Congress by increasing their role in housing finance. ...All of which would seem to make the CEOs of Fannie and Freddie the world's most overpaid bureaucrats. A release from the Federal Housing Finance Agency that also fell in the Christmas Eve forest reports that, after presiding over a combined $24 billion in losses last quarter, Fannie CEO Michael Williams and Freddie boss Ed Haldeman are getting substantial raises. Each is now eligible for up to $6 million annually. Freddie also has one of the world's highest-paid human resources executives. Paul George's total compensation can run up to $2.7 million. It must require a rare set of skills to spot executives capable of losing billions of dollars. Where is Treasury's pay czar when we actually need him? You guessed it, Fannie and Freddie are exempt from the rules applied to the TARP banks.