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Chasing Cash Instead of Crime

When Cops Seize Property from Michael Haugen at The National Review

If this situation sounds like an abuse of constitutional due process, it is — and it gets worse. Because the property itself “commits” a crime under civil forfeiture, the burden of proof is on the property owner, who must prove that the property was not involved in criminal activity, or that he didn’t know, or couldn’t have known, that it would be used for that purpose. And since law-enforcement agencies usually get to retain most, if not all, forfeiture proceeds upon final disposition, this creates a perverse incentive to be as aggressive as possible in pushing civil forfeiture to its limits.

It isn’t just the government that’s making money, either. DEA agents paid one Amtrak secretary $854,460 over two decades to provide information on travelers. Initially this was done only at an agent’s request, but soon the secretary “began making queries on his own initiative.” The potential for civil forfeiture to corrupt otherwise well-intended law-enforcement activity is very significant, and evidently isn’t limited to government actors. Ordinary citizens should not be co-opted to aid in a constitutionally dubious practice with the allure of hefty remunerations, nor should they be incentivized to take law into their own hands.

“We want the cash,” proclaimed a former drug-task-force supervisor who oversaw one such operation attached to Chicago’s O’Hare International Airport. “Good agents chase cash.” This sort of sentiment is an unfortunate example of how the perverse incentives behind asset forfeiture can transform an otherwise legitimate crime-fighting tool into a constitutional nightmare, and well-meaning law-enforcement officers into de facto revenue generators.

Good agents don’t chase cash, they combat crime.

HKO

Asset forfeiture laws are morally and legally reprehensible.

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Unbridled Rent Seeking

from Holman Jenkins, Jr. at The Wall Street Journal, Regulation vs. The American People

If Mr. Obama was “deeply frustrated,” the reason was the American people’s lack of support for his agenda. And what the Times calls his regulatory strategy would better be described as unbridled rent seeking.

That’s the term economists use for exercising government power to create private gains for political purposes. Consider:

Mr. Obama’s bank policy dramatically consolidated the banking industry, which the government routinely sues for billions of dollars, with the proceeds partly distributed to Democratic activist groups.

His consumer-finance agency manufactured fake evidence of racism against wholesale auto lenders in order to facilitate a billion-dollar shakedown.

His airline policy, urged by labor unions, led to a major-carrier oligopoly, with rising fares and profits.

His FDA is seeking to extinguish small e-cigarette makers for the benefit of Big Tobacco and Big Pharma (whose smoking-cessation franchise is threatened by cheap and relatively safe electronic cigarettes).

We could go on. Mr. Obama’s own Council of Economic Advisers complains about the increasing cartelization of the U.S. economy—as if this were not a natural output of regulation. In a much-noted Harvard Business Review piece this spring, James Bessen, an economist, lawyer and software entrepreneur, cites increased “political rent seeking” to explain the puzzle of rising corporate profits in the absence of job creation and economic growth.

The truth is, government playing neutral arbiter over the private economy doesn’t produce rents. A stable and predictable regulatory system produces only mingy or non-existent rents.

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Determined to Save

From Barron’s Stephanie Pomboy: A Grim Outlook for the Economy, Stocks by Leslie Norton

Post-crisis, the consumer has clearly pulled back. How many months did we have disappointing retail sales numbers that no one could explain? They’d say it’s too hot, too cold, there’s Brexit. But what’s really causing this slowdown in spending is that the post-crisis consumer is determined to save, and do it the old-fashioned way. Historically, when rates go down, people save less. In this cycle, things have completely reversed. Over the same stretch of time that the two-year note has gone from 4% to 1%, the savings rate has doubled. There are mountains of evidence to support my thesis. But every Wall Street analyst and the Fed is using the pre-crisis analytical framework to look at an economy that is fundamentally challenged.

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The Buyer of Last Resort

George Gilder

George Gilder

So there we have it. The unicorn buyer of last resort will be the Fed. The “lender of last resort” for the financial system, the governmental guarantor for all the big banks and other “systemically important financial institutions,” the backup reinsurer for windmill Quixotes, ethanol pushers, and solar prospectors, the last ditch for Fannie Mae and Freddie Mac and other mortgage packagers, the default financier for the trillions of dollars of student loans, for veterans’ hospitals, for underfunded pensions and Medicaid reserves of the states, and above all for the proliferating securities and insecurities of the federal government, this same federal fount of funds and faith is also seen as the savior of Silicon Valley. What assures a soft landing for the hang-gliding unicorns is the Fed. Is the ultimate symbol of our predicament not a bailout for middle-class mortgages but a backup of imaginary money for mythical beasts?

Gilder, George (2016-03-28). The Scandal of Money: Why Wall Street Recovers but the Economy Never Does (Kindle Locations 1791-1797). Regnery Publishing. Kindle Edition.

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The Medicis of the Ozarks

From Jonah Goldberg at National Review, House Clinton and the Wages of Corruption

The money isn’t the primary issue with the Clintons and it never was. Sure, sure, they like being rich. They like flying around in private planes. They like having lots of houses. But the Clinton Foundation was never about getting rich, it was about keeping the Imperial Court in Exile well-tended to for their return to power. Huma’s amazingly corrupt moonlighting wasn’t about money grubbing per se, it was about keeping Hillary’s Richelieu on the payroll.

The Clintons are a tribe, a House like House Lanister or House Harkonen. They trade power, fame, influence and, sure, on occasion, money to advance the interests of their House.