Free speech, alive and well

I noticed the 'crawl' along the bottom of the TV screen this morning mention that NPR had fired Juan Williams over some comments that he had made. When I was able to get to a computer, I found a link to this story in my RSS reader. I thought it was fitting that the story came from Fox News since Mr. Williams is a regular contributor to Fox and his fateful comments were made on a Fox program. The linked story cites this quote as the reason for the firing:

I mean, look, Bill, I'm not a bigot. You know the kind of books I've written about the civil rights movement in this country. But when I get on a plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they're identifying themselves first and foremost as Muslims, I get worried. I get nervous.

Mr. Williams's first mistake was prefacing his comments with "I'm not a bigot." Whenever someone prefaces a comment with, "I'm not X", at best, it means that he/she fears that his/her comments will be interpreted so as to paint him/her as X and, at worst, that that person really is X. It's sort of the same way that the phrase "with all due respect" is interpreted as "I have no respect for you".

I have to admit, though, that I don't really see what the uproar about this particular comment is all about. The September 11th attacks were carried out by Al-Qaeda, a militant Islamic group. The Christmas Day bomber and the Times Square bomber both cited their religion as reasons for their actions. The U.S. continues to agitate Muslims around the world with its continued presence in Iraq and the war in Afghanistan in addition to indefinitely detaining and torturing people without charges when it is not just killing them both on and off the battlefield. In light of those actions, it seems reasonable to expect further violence to be attempted, if not perpetrated, against the U.S. by the very recipients of this U.S.-style democracy. I'm not sure that being nervous about flying with a Muslim is entirely irrational.

Glenn Greenwald takes up the case against Juan Williams this morning. In his article, some more context is provided for Mr. Williams's comments. Immediately prior to the earlier quote, Mr. Williams said this:

Well, actually, I hate to say this to you because I don't want to get your ego going. But I think you're right. I think, look, political correctness can lead to some kind of paralysis where you don't address reality.

This was said in response to Bill O'Reilly's "Talking Points Memo" which had aired just previous to Mr. Williams's comments in which Mr. O'Reilly had said:

The world is on edge because millions of Muslims accept violence and enable jihad. In order to correct the economy and the terrorist threat, those [referring also to the fact that private businesses are not hiring] things must be understood and stated.

These two statements properly deserve all of the outrage, in my opinion. Millions of Muslims do not accept violence and enable jihad. The U.S. government, itself, says that there are probably less than 100 Al-Qaeda members fighting in Afghanistan. It admits that many are probably hiding in Pakistan, but even being generous would probably place the total number under 1,000. Muslims make up almost a quarter of the world's population. If they all really supported violence and jihad, even if merely millions of them supported it, they would have destroyed the U.S., whose military only numbers about 1.4 million, quite decisively a long time ago. In fact, most (the percentage of "radical" Muslims is almost infinitesimal, but still prevents one from saying "all") Muslims are peaceful, preach peace, and abhor the violence perpetrated in their religion's name.

I'm not really sure how I feel about Juan Williams being fired by NPR. To be honest, I don't care enough to try and decide. He may have been a good reporter, but I never cared too much for his opinion pieces on various Fox shows. What is interesting to me is the outcry from the political right that his free speech rights are being violated because NPR gets a significant portion of its funding from the federal government. (Funny, that in this instance, they are, all of a sudden, civil libertarians.) Eugene Volokh contends that acceptance of government funds does not, on its face, make one a government actor and therefore obligate one to protect the free speech of others. I tend to agree. To argue the opposite is to open up a Pandora's box of (further) government intrusion into private affairs. As Mr. Volokh reasons, there is nothing preventing Congress from attaching strings to funds that it allocates (which it has not done in this case), but I would argue that Congress shouldn't be allocating funds to private businesses in the first place.

Government bailout turns a profit

According to Bloomberg news:

The U.S. government’s bailout of financial firms through the Troubled Asset Relief Program provided taxpayers with higher returns than they could have made buying 30-year Treasury bonds

I'll be honest; my first reaction to this was, "Oh no, I'm going to be forced to admit that the government did something right". Indeed, according to the article, the government invested $309 billion in Wall Street bailouts via the so-called TARP program, of which, about $200 billion has been repaid. Not only that, though. The government has also earned $25 billion on its investment. What's not to like?

How about the fact that the bailouts didn't actually work? Unemployment actually skyrocketed while the government was supposedly making this profit. These unemployment numbers are "official" ones, by the way. "Real" unemployment is actually nearly twice as high, and even that number doesn't paint a totally accurate picture of the economy. It fails to account for falling wages, part time workers who had and/or want full time work, and those who simply are no longer looking.

Here's the real reason to be upset about the bailout, though, and Bloomberg, to its credit, points it out.

One of those subsidies [to the banks] is the $350 billion that savers forgo each year because the Fed keeps interest rates near zero, according to Petzel’s calculations. While banks can borrow at close to zero from the Fed, they lend to consumers and corporations at almost 5 percent, or to the Treasury at 2.5 percent, and they get to keep the difference.

Take a second to do the math. The American taxpayers have given up over $700 billion (so far). That is more than double what the government originally invested and gained via that investment. So, we have the taxpayers, the government, and the banks. Government comes out $25 billion ahead. Banks come out $700 billion ahead. (This is debatable since the banks also took losses. However, those losses are mitigated by this $700 billion). Taxpayers come out $700 billion behind plus the wrecked economy.

It doesn't end there, though.

According to Prins’s tally, the money plowed into the financial system to prop it up peaked at $19.4 trillion. Banks have benefited from that cash, which helped keep prices of mortgage securities, house prices and other assets overvalued, Prins said in an interview. Even though some of the support has been withdrawn, part of it will likely be lost, such as the hundreds of billions of dollars put into Fannie Mae and Freddie Mac, she said.

"These are all indirect subsidies the banks got," Prins said. "So the TARP gains touted by the Treasury are only true if you ignore all the other costs."

Keep these other costs in mind the next time someone tries to tell you that the bailouts worked or that the government (and supposedly, by extension, the taxpayers) actually made money on the deal.

Gold, subsidies, and syphilis

There were a number of news stories that caught my attention today, and I decided to just lump them all into a single post. I'm sure at least two of them will get better treatment in the future.

Gold

Gold reached another high yesterday against the the U.S. dollar. Many seem to be blaming the weak dollar and actions by the Federal Reserve. The Fed over the last few days and weeks has been hinting that it may embark on another round of quantitative easing or QE. Wikipedia has a pretty good explanation of QE, but in the most basic terms, the Fed is preparing to print more money. Lest you think that the rise in gold is a strictly U.S.-related phenomenon, take a look at this chart. Inflation and/or economic troubles/concerns seem to be widespread.

Subsidies

Yesterday, I was able to catch various pieces of Marketplace on NPR while driving through the hills. The station cleared up enough for me to catch this particular piece. The government, as part of its "stimulus package" has been giving money to private businesses to induce them to hire people. It sounds like a good plan, but here is the problem: the government is distorting the market. By providing subsidies, the government is causing businesses to hire and expand because there is no financial risk to not doing so, not because the economy can actually support that expansion.

I have a number of problems with this, but let me just leave you with this thought: If this policy is good for the economy, why not keep it going?

Syphilis

For those who didn't know (and I have to include myself in that group), the U.S. government deliberately infected Guatemalan prison inmates with syphilis back in the 1940's as part of an experiment to test the effectiveness of penicillin in the prevention of the disease. Well, yesterday, Health and Human Services Secretary Kathleen Sebelius and others issued an apology for U.S. participation in those experiments. Perhaps these people can expect an apology sometime around the turn of the next century?