Obama Chooses Head of HUD

President-elect Barack Obama has chosen New York City housing commissioner Shaun Donovan as secretary of HUD. With the mortgage crisis still in full swing, Donovan will have plenty to do. Donovan is unusual among public officials in that he foresaw the foreclosure crisis as early as 2004.

Car Bailout Pits North vs. South

A striking pattern has emerged in the fight over bailing out the big three automobile companies. Senators from the north are for it and senators from the south are against it. Why? It turns out there are assembly plants in both the North and the South. The ones in the North are owned by American companies and are highly unionized; the ones in the South are owned by foreign (mostly Japanese) companies and are not unionized. Hourly pay in northern and southern ones is comparable but benefits are much better in the North. Southern senators who oppose the bailout don't really object to the government interfering with private industry and don't really even mind a government-appointed car czar running the companies. The sticking point is that they want to break the unions and force union members to take cuts in pay and benefits to bring them down to the level that the workers in the South get. In this way, workers will see that unionization has no value and won't be inclined to join unions in the South, which will greatly please the foreign auto companies and keep them firmly attached to the South. So what may look at first like a noble principle (keep the government's nose out of the private sector), is really a parochial interest (keep unions out of plants in their states so foreign companies will continue to invest there). Some observers say that in the deep South, there is not much difference between union and Union Army.

Republicans from the North think differently. Sen. George Voinovich (R-OH), for example, supports the bailout because there are many unionized big three auto plants in Ohio. He says Republicans from the South are using the bailout as a weapon to break the unions (which strongly support the Democrats). Chris Bowers points out that 18 of the senators who opposed the $14 billion bailout of the big three automobile companies voted for the $700 billion bailout of the banks. In other words, they have no ideological problem with the government interfering with private industry. Their problem is that the proposed bailout didn't break the power of the United Auto Workers. If that had been included, another $14 billion on top of the $700 billion they already voted for would not have been a dealbreaker.

Two Cheers for Rod Blagojevich

Frank Rich has a biting column today pointing out that snagging Rod Blagojevich is the second coup of prosecutor Patrick Fitzgerald in the past five years. The other one, Scooter Libby, was far bigger. While Blagojevich is merely a small-time crook who used his office to try to make a buck, Libby was part of a deliberate conspiracy to sell a war to the American people on false pretenses and punish anyone who tried to reveal the truth. Rich then goes on to show that malfeasance by executives at Enron, Moody's, and Citibank is far worse than the Spiro-Agnew-class stuff Blagojevich did and will cost the taxpayers far more in the long run.

As a result of the Blagojevich scandal and the legacy of Mayor Daley, many people think Illinois is the most corrupt state. It's not. The NY Times has prepared tables on the number of government officials convicted of crimes per year during the period 1998 to 2007. In terms of most convictions, Florida is the most corrupt state. In terms of convictions per capita, the most corrupt state is North Dakota, with Illinois 18th among the states. Here is the story.

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