BuckeyeBlog

The Ohio House Committee on Housing and Urban Revitalization held a hearing today on HB 3, a bill to “address the current mortgage foreclosure crisis.”  From what we’ve been able to learn (the bill is still in ‘placeholder’ form), the sponsors would effectively ‘nationalize’ in Ohio the private contract between a home loan borrower and lender, even if the Feds were to pass on this. 

We expect the bill to include a mortgage payment moratorium as well as ’cramdown’ provisions where state judges would be given the power to rewrite mortgage provisions. Together these provisions would change the relative situation of debtor and creditor originally established by contract.  By violating the sanctity of the voluntary private contract that structures the utilization of private property in free market economies, these moratoriums and cramdowns would compel creditors to give up value of their private property for political ends. 

Remember: Socialism is a centrally planned economy in which the government controls all means of production.  By aquiring control over the contracts that utilize private property, goverment is aquiring control of a means of production and subjecting it to the central planning of politics and politicians.  If HB 3 were to become law with these provisions, it would be a step toward socialism in Ohio.

For more on the mortgage foreclosure issue see our new policy brief by Marc Kilmer.  Marc shows how the proposal not only takes a sledgehammer to one of the central tenets of economic freedom in Ohio, is at the same time unconstitutional, redistributes wealth and opportunity from those who pay their mortgages to those who don’t, and is simply the wrong solution for the wrong problem.

Portage is a village near Bowling Green where I grew up, physically, anyway. The Blade reports the current mayor is fed up and walking out. General petty allegations all around and back and forth. A lawyer friend once identified this as the “Three-year-old Defense”, e.g., “I didn’t violate the permit; you violated the permit.” Same thing here: “I’m not the one with the petty, secret agenda; you’re the one with the petty secret agenda.”

You might think that this changes with sophistication but if you did you’d be wrong. There’s a nice little blurb in the Dispatch today about John Kasich taking the obligatory shot at Gov. Strickland. (Sorry, couldn’t find a link.) It’s about four column inches. This kind of thing barely makes it over the bar as news. Partisan eruptions, okay, you have to cover them, especially at a convention, because that’s all there is and people need to be able to pay attention to it if they choose to.

But two of the four column inches are boilerplate Strickland response. Good Lord, that’s a pure waste of time. That was just as weak when it was first published as news as Kasich’s attack, and it certainly isn’t news rehashed.

In reality, it’s probably not necessary to publish the opponents’ response to what is initially nonsense anyway. But if you feel obligated to follow the form, even if it results in predictable crap, then at least limit yourself to a sentence.

The debate about payday lending has been notable for the anti-lending forces as well as those in the press (am I being redundant?) fail to grasp basic facts about the payday loan industry. I have documented that repeatedly on this blog. It seems that I have more work to do, however, based on today’s editorial in the Dayton Daily News. Let me just comment on a few of the more egregious departures from reality the editors make:

There are alternatives to payday lenders. Credit unions, for instance, and even some banks will make short-term loans for much more reasonable rates.

Really? Then why do people choose payday lenders who, in the view of these editors, rip them off? Are these consumers idiots? Well, no, since the notion that credit unions or banks are going to be making high-risk, unsecured loans at low rates to a large number of people is ridiculous. It isn’t happening now and it won’t happen when the ban goes into effect. The fact is that these high rates are necessary to provide the product that borrowers want and need.

After Sept. 1, short-term loans simply would be capped at 28 percent on an annualized basis, versus the 391 percent that can be charged now. Borrowers would pay $18 for a two-week $300 loan, not $45.

No. A 28% APR on a two-week, $300 loan is $3.23. Would you loan money to someone for that low of a rate? Would you make a profit if you did?

But when lawmakers looked into the payday businesses’ practices, they found that many customers were being encouraged to take out loan after loan because high fees were trapping them in debt.

That sounds like lawmakers actually did a study of the issue and discovered the borrowing patterns of those who take these loans. That didn’t happen. They heard from a handful of people who needed a payday loan at the time but, in retrospect, didn’t like the price they paid. But these borrowers agreed to pay the price at that time, indicating that the viewed it then as a fair price. Furthermore, there was no evidence that people were being encouraged to take out more than one loan. The plural of anecdote isn’t data. (more…)

Frank S. Meyer is a somewhat forgotten figure in the conservative movement today (compared to, say, William F. Buckley or Barry Goldwater). But he was an important conservative philosopher who did his best to unite the libertarian and traditionalist wings of the conservative movement by showing how a belief in God and a respect for human liberty come from the same source and cannot be separated.

I’m reading his book The Conservative Mainstream right now. There are nuggets of wisdom on every page and I’d urge everyone to find a copy and read it closely. In lieu of that, I feel obliged to share these two quotes with readers of this blog because they seem especially relevant to the present political debate, although they were written decades ago. The first, written in 1965, seems a perfect prediction of what has happened to the GOP under the Bush Administration and the recent leadership in Congress:

If the [conservative movement] allows fascination with methods and techniques to become primary in its thinking, it will inevitably succumb to the temptation of gaining power for the sake of gaining power. If it wins, those who achieve power will be the prisoners of their methods, little different in essentials from the men who hold power today. Concentration on method without the greater emphasis on transforming popular consciousness can only lead to rivaly with the Liberals in appealing to the baser instincts of the people. The conservative movement has a more difficult task: to appeal to the higher instincts and beliefs that survive, half smothered, in the American people. This is the only foundation for a victory worth winning.

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The Dispatch reports:

Ohio Sen. Sherrod Brown, who had adamantly opposed [offshore] drilling, is among those warming to the idea. He says any exploration would have to be far from the coast and that the oil produced would be used in the United States, not abroad.

So clearly Senator Brown has no idea how the oil market actually works, does he? After all, it’s not as if U.S. oil is only sold in the U.S., Saudi oil is only sold in Saudi Arabia, Mexican oil is only sold in Mexico, etc. Oil is a global commodity. There is a global market for it. Any attempts to horde oil for sale in only one country would either be completely ineffective or provoke a flurry of harmful counter-measures. As a nation which buys a large share of its oil from overseas, do we really want other nations to refuse to sell their oil to us? (more…)

Thomas Suddes wrote this op-ed in Sunday’s Columbus Dispatch regarding the Ohio Supreme Court’s recent decision to compel Ohio Secretary of State Jennifer Brunner to appoint Brian K. Daley to the Summit County Board of Elections. The Summit County Republican Party Executive Committee recommended Daley after Brunner refused to appoint the committee’s first choice, Alex Arshinkoff.

Despite Suddes’ claim that the court deployed “activism” in reaching its decision, the reality is that the court was presented with a statute that is ambiguous as it relates to the relative roles of the county political parties and the secretary of state in appointing members of the county boards of elections. The justices used their interpretive skills to effectuate an outcome that is consistent with the text and intent of the statute.

This is nothing compared the court’s past activism. During the 1990s up until 2002, the Ohio Supreme Court regularly found itself in protracted battles with the General Assembly by striking down laws related to school funding, tort reform, workers’ compensation reform and other public policy matters. Today, following a series of retirements and subsequent elections, a majority of the court has emerged that respects the doctrine of separation of powers and recognizes the authority the Ohio Constitution gives the General Assembly to enact public policy. Two justices - Maureen O’Connor and Evelyn Lundberg Stratton - who are part of that current majority - are up for re-election this year. Accordingly, the November election will help determine the future direction of the Ohio Supreme Court, including whether it will maintain its current path of acting with restraint from the bench or return to its activism of the past by regularly second-guessing the policy decisions of the General Assembly.

It’s always fun to attend a political convention or a central committee meeting of a party. Most of the time, the believers berate the pragmatists. And why not? Power versus principle, it’s a great debate. Power without principle is contemptible; principle without power is pretty, but pointless, except as art.

Ohio Democrats are probably reasonably happy, if they can avoid thinking about Marc Dann, and they can, can Dann, that is. But if you care about principle, maybe they shouldn’t be.

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Former Florida Governor Jeb Bush was the guest speaker last night at the Ashbrook Center’s annual gala, filling in for Tony Snow, whose return to health all should be praying for.

Even taking into account an expected bias in reporting on his eight year’s tenure as governor, Gov. Bush has an impressive record of free-market, conservative accomplishments.  As such, his tenure serves as a benchmark for understanding why Florida is a place where jobs and prosperity grow, while Ohio is where they are in decline.  See this WSJ op-ed from 2006 for more details.  

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The AP reports that the central government of the People’s Republic of China is requiring its agencies cut spending by 5% in response to the recent earthquake. Compare that to the $1.5 billion spending increase Ohio’s politicians are currently pursuing in the name of “stimulating” our state’s economy.

A country raised on Mao’s Little Red Book shames Ohio’s political class through its vigorous embrace of limited government.