31 May 2009 @ 5:18PM >> Slate’s Mickey Kaus looks at the the Obama Administration’s bailout of the United Auto Workers union and asks:

Why should the government tax unskilled workers making $18 an hour, who haven’t bankrupted their employers, in order to protect unskilled workers making $28 an hour, and who have bankrupted their employers, from having to take a pay cut?

29 May 2009 @ 6:47PM >> The recent post on the FDA’s regulation of Cheerios as a drug generated a lot of e-mail from readers. Last week, I posted a well-reasoned disagreement with my view on the matter.

Here are a couple more responses:

Maybe the cholesterol lowering qualities are not the result of the Cheerios themselves, but the fact that the person eating Cheerios for breakfast is not eating a food that might increase one’s cholesterol level, i.e. bacon. Would the FDA be justified in stepping in then? I have to imagine if you had a side of bacon (a few slices) with your Cheerios everyday, your cholesterol would not be lower by 4% in 6 weeks. To me this is common sense. Unfortunately, there are too many people out there who have given up thinking for themselves and are reliant upon others telling them what is good and what is bad. Enter the Nanny-state.

And:

I just want to encourage you concerning your take on the FDA regulating Cheerios like a drug. It seems as though we as a nation have completely lost all common sense, and I can hardly take it anymore.

Is it really a revelation that food affects health? Before we became a nation of pill popping hypochondriacs, how do you think we consumed beneficial nutrients?

Since Cheerios might be able to make health claims, and therefore should be treated like a drug, it makes sense that the FDA should also treat milk like a drug, and investigate those potentially spurrious claims that it “does a body good”. Several years ago, there was an opinion that eggs increased cholesterol. Should the FDA have classified eggs as a harmful drug? Where does it end?

Food products are already regulated to require the disclosure of ingredient lists and nutritional information. Any nutritional scientist can consume the information already required of a food manufacturer and conclude potential health benefits and risks. If a product contains 3000mg of sodium per serving, for example, does it really take a clinical study to determine that it is not heart-healthy? You could not use the same method to evaluate Ambien or Prosac.

Of course, I am making my argument based on common sense. Since common sense is rapidly going out of style, perhaps I should just concede. Let’s treat anything healthy like a drug, just to make sure everyone is “safe”. Calling my doctor now to stock up on prescriptions for citrus - need that vitamin C.

28 May 2009 @ 6:15PM >> One reason I really enjoy operating Brain-Terminal.com is that I get so many nice notes from people wishing me well. Here is an e-mail I received recently from one fan of my work:

From: Aca Acambaro <aca_group@hotmail.com>
To: Evan Coyne Maloney
Subject: Hilarious

Usually I need to hear or read a few sentences to figure out who is a moron, but you win the prize, one can see your utter stupidity in less than 3 words. I wouldnt even bother with any intellectual debate your fucken morons, well I dont mean to insult fucken morons, but thats as close as I can get. Icomplete web site whose IQ adds up to 1.9 if that, I htink I will go talk to a maggot or slug, will getmore out of it, oh well you get the idea, ummm actually you mos liekely dont thats the funny part.

Aca,

Thank you for taking the time to construct your informed critique of my website.

I have spent years trying to mask the fact that I am a moron. Most of the time, I get away with it. Unfortunately, to an astute observer such as yourself, my “utter stupidity” is readily apparent.

But I would like to rectify that. So if you would be so kind as to identify the “less than 3 words” that made you recognize my mental deficiency, I can rewrite those few syllables and hopefully continue fooling my fellow morons.

Any assistance you can provide in weaning me from my ignorance would be most greatly appreciated.

All the best,
Evan

26 May 2009 >> Reverend Jeremiah Wright’s most famous congregant dishes out another heaping helping of racial healing with his Supreme Court pick:

I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.—Judge Sonia Sotomayor,
President Barack Obama’s nominee for the Supreme Court

Apparently, however, Judge Sotomayor was not referring to herself.

21 May 2009 @ 7:26PM >> In 21^st century America, the federal government’s solution to every financial problem seems the same: people who are responsible with money are forced to foot the bill for the reckless. Video >>

21 May 2009 @ 8:44AM >> Once again, it seems that the people who follow the rules and pay on time are going to get stuck with the bill for those who don’t:

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

20 May 2009 >> Brain Terminal reader Blake I. Markus disagrees with my take on the Food & Drug Administration’s apparent desire to regulate Cheerios:

Evan,

I have a small complaint about your article, Kids! Just Say No... to Cheerios. I normally agree with your sentiments, but this one is hard to swallow.

I am very libertarian when it comes to limiting the control of the federal government. I do not believe the government should regulate individual and ordinary decisions of regular citizens. In the game of life, the government’s role should not be deciding where to move the pieces.

However, the government must act as Milton Bradley and set the rules that make it possible to play the game fairly. Rules such as antitrust laws, banking regulations, and criminal penalties are necessary to ensure the People don’t get screwed in one form or another by other people or businesses who take too much control, engage in fraudulent behavior, or try to otherwise gouge or mislead a consumer.

With regard to your article specifically, it appears that your argument for why the FDA’s decision is a bad one, is that the government is just trying to enforce a rule for the sake of enforcing a rule and engaging in “nanny” behavior.

While I agree that the government, especially as of late, has been engaging more and more in parental decision-making, I think the actions taken by the FDA are correct. The problem isn’t that “idiots might get confused and mistake a bowl of Cheerios for a pile of Lipitor.” The real problem is that the FDA cannot set a precedent of letting products be advertised as giving specific health benefits without meeting the rigorous FDA standards established for that type of advertising.

I’m assuming here that the FDA did not approve the so-called “clinical study” that was done by General Mills, a company who does not do “clinical studies” on a regular basis. If such a precedent were to be set, herbal supplement companies could make specific claims about their products (more specific and more often than they already do) that were not correctly tested.

This decision by the FDA is a difficult one, I must say. I don’t believe there would even be an argument if this scenario were more like an herbal supplement company stating that the ingredients in the supplement will guarantee on average a 10% weight loss and 14% muscle gain, but those studies were based only on clinical trials conducted on lab rats, and the results only counted the rats who were left living after the study was over.

But the sad truth is, even though this is a children’s cereal that is practically an institution among breakfast foods (and late night desserts, as you have pointed out), the rules are in place to prevent harm to the consumer in the face of bad studies. If Cheerios conducted an FDA approved study and it was found that the decrease in cholesterol was negligible and it actually increased the likelihood of testicular cancer in young men, you would likely be changing your tone about this “nanny” decision.

Thank you for your time, and please keep writing your wonderful blog entries. While I had to say something against this entry, I am often pleased by what you have to say.

Regards,

Blake

Thanks for the e-mail, Blake. I think you have a good point with respect to herbal supplements. However, I think the Cheerios case is different in one key respect.

Herbal supplements are intended to improve someone’s health or state of mind. That’s the only reason people buy herbal supplements: to consume them like medication. So regulating them like a drug makes sense to me.

But the original and primary function of Cheerios to fill the stomach and provide the body with energy. Cheerios is tasty, and that’s a nice side-benefit, as is the apparent cholesterol-lowering power. But such benefits are secondary.

Now, if General Mills is making claims about Cheerios that are false, that’s a much more defensible case for government regulation. But in the reporting I’ve seen, nobody disputes the health claims made by General Mills. I haven’t seen anyone question the legitimacy of the studies about Cheerios cholesterol-lowering properties.

So why, then, shouldn’t the burden of proof be on the government?

Before regulating Cheerios like a drug, why doesn’t the government first commission its own independent study and see if the claims about Cheerios are false?

That seems reasonable to me, and it would certainly constitute far less government interference in private enterprise.

That’s my take on it, although I could be wrong. The media reports on this story haven’t exactly been paragons of clarity.

---

Update: In another report, it seems the FDA is questioning the claims of General Mills: “We certainly don’t have any issues with the safety of Cheerios,” Stephen Sundlof, director of the FDA’s Center for Food Safety and Applied Nutrition, said in an interview today. “We just believe that the labeling on this particular product has gone beyond what the science supports.”

13 May 2009 >> Cheerios. It’s a tough habit to break.

I should know. I’ve been there.

There have been many nights when my dessert consisted of a bowl of Cheerios. On certain nights, two or more.

So I understand how hard it is to extricate oneself from the clutches of such a potent addiction.

I understand why Our Benevolent Nanny, the federal government, treats Cheerios like a drug:

The FDA has sent a warning letter to General Mills, telling the company that its claims about the health benefits of eating Cheerios “would cause it to be a drug because the product is intended for use in the prevention, mitigation and treatment of disease.”

The problem: Cheerios are a food not a drug, the FDA notes in the letter, which was sent May 5 but was posted on the agency’s website today. Thus, claims that the 68-year-old whole-grain oat cereal lowers cholesterol and reduces the risk of heart disease and cancer violates federal law, the agency said.

[...]

The FDA was particularly unhappy about assertions on Cheerios boxes and its website that eating the cereal can “lower your cholesterol 4% in 6 weeks.” The FDA counters that the cereal must be approved as a drug before making such specific health claims.

General Mills spokesman Tom Forsythe said the cholesterol-lowering claim has been featured on the Cheerios box for more than two years and that the heart health claim was approved by the FDA 12 years ago. On April 20, General Mills announced results of a clinical study that showed eating two daily servings of Cheerios (1 1/2 cups each) can reduce cholesterol 10% in just a month.

“The science is not in question,” he said. “The scientific body of evidence supporting the heart health claim was the basis for FDA’s approval of the heart health claim, and the clinical study supporting Cheerios’ cholesterol-lowering benefits is very strong.”

Forsythe said the company looks forward “to discussing this with the FDA and to reaching a resolution.” General Mills faces seizure of products or an injunction against making and distributing Cheerios.

As the Los Angeles Times reports the story, it seems that the government’s complaint about the cholesterol claim isn’t that it is false. The problem, according to the FDA, is that because Cheerios is effective at lowering cholesterol, idiots might get confused and mistake a bowl of Cheerios for a pile of Lipitor.

According to government regulations, if Cheerios provides the health benefits claimed, that fact itself is all that’s needed for the government to treat it as a drug. Nevermind that it isn’t a drug. Nevermind that, for decades, schoolchildren have understood that Cheerios is food. Nevermind that. This is the government and the rules must be enforced, common sense be damned.

Anyone who looks at a box of Cheerios and sees a product “intended for use in the prevention, mitigation and treatment of disease” is the type of person whose mortgage I’ll end up paying someday. So screw him. If he can’t distinguish between cereal and medication, then let him get ripped off for that $5 a week habit, I say. Consider it stimulus by stupidity.

After all, what’s good for General Mills is good for America.

12 May 2009 >> Yeah, let’s trust our health care to the same people responsible for this:

Millions of Americans on Social Security are receiving $250 checks as part of the president’s stimulus plan — including an Anne Arundel [County, Maryland] woman who died more than 40 years ago.

The woman’s son, 83-year-old James Hagner, said he got the surprise when he checked his mailbox late last week.

“It shocked me and I laughed all at the same time,” Hagner said. “I don’t even expect to get one my own self, and I get one for my mother for 43 years ago?”

His mother, Rose, died on Memorial Day in 1967.

12 May 2009 >> Courtesy of the Associated Press:

The government will have to borrow nearly 50 cents for every dollar it spends this year, exploding the record federal deficit past $1.8 trillion under new White House estimates.

11 May 2009 @ 8:27AM >> Chrysler, the car company that will soon be owned by the federal government and the powerful union partially responsible for driving the company into the ground, is no longer honoring “lemon law” settlements to buyers of bad cars:

Chrysler’s bankruptcy is throwing a wrench into California’s lemon law, which is intended to make it easier for consumers to get refunds for defective vehicles. As the automaker’s bankruptcy grinds away, settlement checks from Chrysler to unhappy car buyers are bouncing and complaints are stymied in and out of court.

Consumer advocates say the situation could erode public confidence in buying new cars at precisely the time the automakers need customers in their showrooms. And Chrysler says it has yet to do anything to resolve the issue.

[...]

State lemon laws, such as the one passed by California in the early 1980s, make it easier for consumers to get refunds for defective vehicles that are still covered by a manufacturer’s warranty.

Under the California law, new or used vehicles that have a defect that can’t be repaired after four attempts — or two, in the case of life-threatening defects — or that have been out of service for 30 days during the warranty period may be designated “lemons.” That triggers an obligation for the manufacturer to either pay the owner a cash settlement or buy back the vehicle.

[...]

Alex Simanovsky, an Atlanta attorney whose firm handles lemon law cases in California and other states, said he had “a stack of six or seven checks in my drawer right now from Chrysler that have bounced.” The amounts range from $2,000 to $3,000 for clients who were accepting cash payments to as much as $40,000 in cases where Chrysler agreed to repurchase the vehicle.

[...]

San Diego attorney Ellen Turnage represents a client who reached a settlement with Chrysler over a 2006 Dodge Magnum with a bad suspension. The car has been returned to Chrysler, but the automaker’s check bounced.

“Now he’s got no car and no money, so he can’t go buy a new one,” Turnage said of her client. “He’s stuck. We’re hanging on to a glimmer of hope that at some point this will all be resolved.”

Apparently, the Obama administration doesn’t mind seeing Chrysler’s customers screwed, probably for the same reason that they don’t mind seeing Chrysler’s lenders get screwed. The only important thing is that the United Auto Workers union gets its big payoff for their vigorous support of Obama’s candidacy.

Unfortunately, the lesson consumers may draw from this story is, don’t buy cars from an American car company.

6 May 2009 @ 9:29AM >> History is rife with examples of mafia ties to labor unions. Now, President Obama is using mafia tactics to steal from bondholders and give the loot to one of his biggest source of campaign funds, labor unions:

The President has just harshly castigated hedge fund managers for being unwilling to take his administration’s bid for their Chrysler bonds. He called them “speculators” who were “refusing to sacrifice like everyone else” and who wanted “to hold out for the prospect of an unjustified taxpayer-funded bailout.”

[...]

The President and his team sought to avoid having Chrysler go [the normal bankruptcy] process, proposing their own plan for re-organizing the company and partially paying off Chrysler’s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse.

[...]

The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to “sacrifice” some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power.

Yesterday, I mentioned the threats made by the Obama Administration against groups that lent money to Chrysler through bond holdings. More sources are contradicting the White House, which denied they made such threats:

Creditors to Chrysler describe negotiations with the company and the Obama administration as “a farce,” saying the administration was bent on forcing their hands using hardball tactics and threats.

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.

The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking “end justifies the means” group they have ever encountered. Another characterized Obama was “the most dangerous smooth talker on the planet- and I knew Kissinger.” Both were voters for Obama in the last election.

It’s interesting that President Obama only uses these mafia-like tactics with fellow law-abiding citizens whose only “crime” is finding themselves opposed to Obama on one issue or another.

When it comes to thugs like Mahmoud Ahmadinejad and Hugo Chavez, suddenly Obama becomes Mr. Warm-and-Fuzzy, and it’s all smiles, handshakes and backslaps.

4 May 2009 >> New York Post columnist Irwin M. Stelzer notes that President Obama “said last week that he’d override the contractual and legal rights of Chrysler’s senior lenders and carve up the company between the government and the United Auto Workers.”

Stelzer continues:

Obama forced the senior lenders to take something like 30 cents for every dollar they’d lent Chrysler. Many lenders — the big banks who’d taken federal bailout money — rolled over. But some hedge-fund managers pointed out that they have a legal, fiduciary responsibility to do the best they can for their investors (which include pension funds) and decided to take their chances with a bankruptcy judge.

Never mind that this is their long-established legal right. Obama is furious with these “speculators,” and hinted that he knows where they live and will get even when the new financial-industry regulations are drafted.

This continued antagonism towards America’s business community may not be in the country’s best long-term interests, Stelzer points out:

[T]he president is counting on some of these “speculators” to partner with the Treasury and take a big stake in the toxic assets that are preventing the big banks from resuming normal lending. Unprotected by a rule of law, these investors will sit on their assets, rather than partner with a government that might some day decide, after the fact, that they made too much money, or should bear a larger portion of any losses than they had signed on to do.

Meanwhile, a prominent bankruptcy attorney, White & Case’s Tom Lauria, alleges White House threats against an opponent of the government’s Chrysler takeover plan:

One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.

The most interesting thing about Lauria’s claim is that the Obama official threated to sic the White House Press Corps on offending “speculators.”

In theory, the White House Press Corps is an independent body, an arm of the press and not the Obama Administration. What would give this official the idea that the press corps would blindly do the administration’s bidding?

Perhaps the press could prove its independence by digging into this story a little bit deeper. (The White House has issued a blanket denial, but the varying accounts don’t add up.)

Nevertheless, I can certainly understand why an administration official might mistakenly conclude the hard-hitting media was merely an extension of Barack Obama’s PR apparatus.

1 May 2009 @ 9:04AM >> Just because the media is trying to convince everyone that Barack Obama is the most popular president in American history doesn’t make it true:

Gallup reports that 56% of the public believes that Obama is doing an excellent/good job. Gallup reported 62% approved of George W. Bush’s job performance after the first 100 days.

I don’t put much stock in polls; careful tweaking of words and phrasing are well-known ways to produce whatever outcome you might want to see. The media seem to be obsessed with polling, though, so we should at least be aware of the games they’re playing.

And if Obama’s about as popular as Bush was at the same point in is presidency, how popular with Obama be by the time he leaves office?