Cato Daily Dispatch for October 25, 2004
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Failed Presidential Candidates Still Collect Taxpayer DollarsBush and Kerry Desire Energy Independence
Fannie Mae Investigation Likely to Last Months
Failed Presidential Candidates Still Collect Taxpayer Dollars
"In three decades of failed U.S. presidential bids, Lyndon LaRouche has never won more than 80,000 votes in any election cycle. He began running for president in 1976 -- the first year presidential elections were publicly financed. Since then he has run seven more times, and garnered $5.9 million in federal matching campaign funds. This election cycle alone he has received more than $1.4 million," The Washington Post Magazine reports.
In "The Failures of Taxpayer Financing of Presidential Campaigns," John Samples, director of Cato's Center for Representative Government, writes: "Presidential public financing has failed to meet its goals. The presidential program has neither increased trust in government nor spurred electoral competition in the primaries or the general elections. By reducing the rigors of fundraising, the system has denied the electorate important information about presidential candidates and given the major political parties significant subsides at taxpayer expense. The American taxpayer has rejected the presidential program, as reflected by the lack of interest in the checkoff program."
Bush and Kerry Desire Energy Independence
"Both major candidates for president want the country to be less dependent on foreign oil. But whoever is elected will face many of the same challenges that defeated attempts by three previous presidents who hoped for the same thing, experts say," according to The New York Times.
"With gasoline at $2 a gallon and American forces uneasily occupying the country with the world's second-largest oil reserves, the issue of American dependence on imported oil has come to prominence only intermittently."
In "Energy Independence? Kerry's Dreaming," Jerry Taylor, director of natural resource studies, writes: "Energy independence won't do any good whatsoever unless we either stop using petroleum products altogether or, alternatively, ban all imports and exports of oil, gasoline, and the like. That's because moving oil around the globe is so cheap and easy that a shortage of oil anywhere in the world increases the price of oil everywhere in the world. How much would prices go up if we withdrew from the global oil market to secure our energy independence? Well, America consumes 20.3 million barrels of oil a day but produces only 5.6 million barrels a day. Knocking out imports would increase oil prices to well over $100 a barrel and blow even today's high gasoline prices through the roof."
Fannie Mae Investigation Likely to Last Months
"Securities and Exchange Commission Chairman William Donaldson said the accounting issues facing his agency in its investigation of Fannie Mae are 'not black and white' and are likely to require many months of study," The Wall Street Journal reports. "The Office of Federal Housing Enterprise Oversight (OFHEO) last month accused Fannie Mae of improper accounting, alleging that the government-chartered mortgage company misapplied Generally Accepted Accounting Principles in areas including accounting for derivative instruments and hedging activities."
In "Fannie Mae, Freddie Mac, and Housing Finance: Why True Privatization Is Good Public Policy," New York University economist Lawrence J. White, a former Freddie Mac board member, argues in favor of the privatization of Fannie Mae and its sister corporation Freddie Mac.
"The special governmental links that apply to Fannie Mae and Freddie Mac yield little that is socially beneficial, while creating significant potential social costs," White argues. The best way to cut down on those costs and risks is privatization, he adds. "This would imply that the two companies would no longer enjoy any special privileges, but would no longer be restricted to their current narrow slice of the financial world. How these companies and their owners would fare in that scenario would then be a matter for markets, and not the Congress or OFHEO, to decide."
The current issue of Regulation magazine contains two articles dealing with Fannie Mae and Freddie Mac: "Competition for Fannie Mae and Freddie Mac?" by W. Scott Frame and Lawrence J. White, and "Beyond Regulation," by Peter J. Wallison.
Jonathan Block, editor, jblock@cato.org