Eye Poll: Scam-eras Don't Work

There are a lot of reasons why Albuquerque's "Photo Enforcement" program shouldn't be in operation, but chief among them is that the city cannot prove that it works. Marty and the boys on the 5th Floor have been trying to support the program for with claims of accident reduction for some time. The truth is that the city has no conclusive evidence that the scam-eras have made us any safer by reducing accidents at photo enforced intersections.

Unfortunately, four-plus years later no credible safety stats have been released; the lone attempt at posting crash data on the Albuquerque Police Department's Web site in 2007 ended with a retraction.

-ABQ Journal (Subscription)

Despite Journal columnist and scam-era shill D'Val Westphal's recent attempt to sell the ill-advised program (ABQ Journal - Subscription), Eye readers just aren't buying that the program works. In fact, 59% of Eye readers that participated in our unscientific poll said there was "no way" that the city's scam-era works. 37% felt that the program absolutely worked, 2% didn't know, 2% didn't care.

Proponents of the scam-eras like to claim that the program changes driver behavior and on this point we agree - drivers either stop short risking rear end collisions or avoid the photo enforced intersections all together. Technically, the program changed driver behavior. However, there's no evidence that this "change" made anyone safer as it either moved the problem or created a new one.

This week we're taking on the Democrat's spending, uh... stimulus package. You might want to remember that every last dime that is spent by government at any level comes from our pockets or the pockets of generations to come.

Caught in the TARP

President Obama has decided to cap the salaries of executives at companies receiving a federal bailout from the Troubled Asset Relief Program. His argument is that executives at companies that receive federal money shouldn't be rewarded for bad behavior.

"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste. It's bad strategy. And I will not tolerate it as president," he said.

-foxnews.com

The problem is these companies have already been rewarded for bad behavior by the Bush administration, and by Congress in the form of $750 BILLION. And if Obama has his way, the federal government will dump another $900 plus BILLION of borrowed money into spending programs that have very little to do with stimulating the economy.

No doubt that today's move will be popular with the American public. In fact, a Rasmussen poll indicates that some 88% of Americans say that executives that receive federal TARP money should not receive bonuses. But there is a down side to all of this.

[Sidebar]
Before some of you absolutely freak out... a lender has the right to set conditions on the use of the money being lent - that includes the government. The problem is that governments are driven by polls and politics that are arbitrary in the best of times. And governments have the power to impose restrictions and terms retroactively - regardless of how arbitrary or capricious those terms may be.
[End Sidebar]

If the value of your work and experience on the open market was $20 an hour and someone like Obama decided that since your company took a TARP injection you should only be paid $5 an hour, what would you do? We dare say most people would start looking to find a position that pays their market value at a TARP free company. The same thing can be said of corporate executives.

While allowing companies to pay corporate executives BILLIONS in salaries and bonuses is obscene when the very companies they lead are tanking, having government step in and mandate compensation is truly frightening and could handicap corporate recovery by making it impossible to attract top talent.

The yahoos that have run GM, Chrysler, and Wall Street into the ground can't and shouldn't be able to demand huge salaries on the open market. In fact, they shouldn't be able to demand a plugged nickel, but that's a question for each company's board of directors and their share holders. Compensation should be based on performance not mandated from Washington by politicians - many of whom are at least as responsible for the current financial situation as corporate executives.

In the long run, capping compensation for positions at any level restricts a company's ability to compete with their non-TARPed competitors. Companies should think long and hard about accepting bailout money from the federal government.

When a company gets caught in the TARP, they are no longer just answerable to their share holders but to 536 politicians in Washington that already have done too much damage to markets through ill-advised legislation and have too much power to do even more damage. Before TARP, the damage was done externally. Companies that take a TARP injection may find it to be a fatal poison that cannot be removed short of death.

Eye Poll: No Bailout

Eye readers were overwhelmingly opposed to bailing out Wall Street. Last week's unscientific poll had 69% of Eye readers saying no way to a bailout, 22% absolutely supported the move, 8% didn't know, and another 1% didn't care (see the results here).

Congress passed the plan that our readers so overwhelmingly rejected on Friday of last week. The pork infested bailout was supposed to be good news to the markets, but so far today we've seen the Dow off over 600 points. Pundits and politicians will have us believe that the market hasn't seen the taxpayer moolah and won't for a couple of months yet therefore the bailout isn't reflected in today's selloff.

Perhaps Wall Street has figured out that all the bailout does is transfer bad debt from financial institutions to government institutions. Instead of having financial institutions collapse we're placing a long-term burden on taxpayers at a time when the Baby Boom Bomb is getting ready to explode. Of course, what is $700 BILLION compared to the TRILLIONS of dollars the social security debacle will cost all of us.

Last week's post on the APD Citywide briefing (read it here) incited a number of passionate responses. It got us thinking about the chief's job performance and whether or not you approve. So that's this week's Eye Poll. Don't forget to vote!

White

Last week's Eye Poll took up the 1st Congressional District race between Sheriff Darren White and former Councilor Martin Heinrich. In this poll Sheriff White extended his lead over the former councilor by two points resulting in a 16 point lead. 57% of Eye readers preferred Darren White, 41% Martin Heinrich, and 1% didn't know (read this week's poll here).

Several weeks ago we ran the same poll with similar results. Sheriff White led that poll by 14 points with 210 votes registered. Last week's poll registered 50% more votes with only 4 voters undecided (view the previous poll here).

So what's the significance? The 1st Congressional District race is certainly attracting more attention and at least with Eye readers, their choices seem to be already made. In the final analysis, this race will come down to how well each candidate gets their supporters to the polls. A large Obama wave would certainly help Heinrich, but Democratic waves have broken on the rocks of the 1st CD before.

This week we'll take a look at the Wall Street bailout. As you might have surmised, we have serious reservations about the ability of politicians (Republican or Democrat) to effectively fix a situation that they are largely responsible for. We'd like to know what you think about Washington's willingness to spend HUNDREDS OF BILLIONS of our tax dollars to buy up loans that shouldn't have been issued in the first place. Don't forget to vote!

Are We Learning Anything?

On this site you'll read on a regular basis our views on liberty and government interference in the market. A free market based on two parties mutually agreeing to provide goods and/or services to one another for a mutually agreed upon compensation does not include a third party controlling or artificially setting the conditions for the exchange.

Our current financial crisis was caused by a third party setting artificial conditions in the market place that ultimately weren't in the best interests of either of the original parties. Of course the third party we're talking about here is the federal government and the politicians that set policy based not on the long term financial health of lenders and borrowers, but on their own short term political health.

Thomas Sowell calls it stage one thinking - the concept that politicians generally think no further than their next election. As a result they're reluctant to head-off a crisis that won't occur until well after the next election. The looming social security crisis is a perfect example of an impending catastrophe that elected officials will not act to avert.

The simple explanation of the current situation and how we arrived here is that politicians interfered in the market place through the quasi-private Fannie Mae and Freddie Mac organizations making it profitable to lend money to people who could not afford to repay the loan. The government backed Freddie and Fannie bought loans from lenders that gave loans to people that should not have them. Where there's a guaranteed sale someone will come along with a product to sell.




To make matters worse, interest only loans were being handed out like candy on Halloween. These loans were sold to people as a way to get into a bigger home for a payment that they could afford. The scheme worked fine as long as property values continued to rise. When values leveled off and then fell precipitously, property owners and the financial institutions holding the note were upside down.

Now we have politicians trying to decide whether or not to spend close to a TRILLION of our tax dollars to fix the mess that they created in the first place. The lesson to be learned here is that quasi-government entities run by political appointees with near limitless financial power have no place in a free market.

Political interference created this mess it's insane to believe that increased government involvement will be the long-term solution - mainly because a good portion of the politicians running the government aren't thinking beyond November. Our fear is that we haven't learned anything and that this whole experience will result in a vast expansion of the federal government into a market that is becoming less and less free.