Sunday, November 30, 2008

OPEC gets tested

The latest example that the powers of OPEC are exaggerated--the drop of the price of a barrel of oil to below $60--that's a roughly 80-90 dollar drop since about July. As soon as oil gets as low as it is now, OPEC members start to reach for each other's throats. There are many lovely things about lower oil prices--one of them is the decreasing ability of political payoffs that most of the OPEC member states rely upon to keep their corrupt regimes afloat. And speaking of corrupt regimes, somewhere in Venezuela Hugo Chavez is sweating it big time--sweet.

Tuesday, November 25, 2008

Thomas Sowell - On Diversity

HT: Liberty Pen

Obama picks his economic team

Robert Rubin protege's are poised to lead Barack Obama's economic team. Rubin, under President Clinton, was a free-trade, balanced budget, and financial deregulation kind of economist. Progressive dreams of massive public works programs very much like the New Deal may be fading away rather quickly and silently.

Monday, November 24, 2008

The line just gets longer, folks! Now its Citigroup's turn!

And now Citigroup gets to line up at the trough! Of course, Wall Street loved the crony-capitalism and had a great day. The taxpayer on the other hand gets screwed again.

Cartoon of the day

Film-makers taking on our 'global warming hysteria'

Can we finally get a documentary that counters some of the off the wall mania surrounding global warming created by Al Gore? There has been very little debate on the subject and since it seems that our political class have already started to make terrible decisions (for example, the expensive subsidy of corn ethanol) regarding "green" solutions, a counter to the emotionally satisfying shill of enviromentalists would be very welcome.

Saturday, November 22, 2008

Thomas E Woods - Principles of 1798

Professor Woods on Thomas Jefferson, the 1st amendment, nullification, and the Virginia and Kentucky resolution of 1798.

HT: Liberty Pen

Friday, November 21, 2008

Best post I've read today on Herbert Hoover and our financial woes

Jeff Perren over at Shaving Leviathan details Herbert Hoover's actions that led to the Great Depression. Sadly, our government seems to be following his footsteps.

Banking deregulation reduces racial wage gap

A recent study by a group of Brown University academics found that one of the benefits of a deregulated banking industry is a reduced (but not eliminate) wage gap between blacks and whites. The theory is that when laws preventing banks from incorporating in other states (than they were already operating in) were eliminated, this eventually led to increased competition and it also created better access for entrepreneurs to start up businesses that would employ more people. The more people employed the more likely hood that racial bias would be reduced. The states with the highest racial wage gap before deregulation seemed to have benefited the most after deregulation. Big government advocates that want to punish the banking industry for the recent financial crisis would do well to look over this study carefully before over-reacting with regulatory schemes.

Thursday, November 20, 2008

Herbert Hoover and the New Deal

Thomas DiLorenzo, Phd. in Economics at Loyola, lectures on Herbert Hoover and the myth that free-market capitalism was the cause of the Great Depression.

HT: Liberty Pen

Tuesday, November 18, 2008

The Magnificence of Disposable Diapers

Art Carden at the Mises Institute sums up the beauty of disposable diapers. As a father of a 11 month old, I can attest to the sheer convenience and time saving traits of the modern disposable diaper. It is another example of how the environmentalists get it all wrong.

Monday, November 17, 2008

The line just gets longer, folks!

If you didn't hear the latest news on the bailout fiasco, American Express recently got the green light to become a bank holding company. Of course, this move gives one of the largest credit card companies a juicy opportunity to lobby for government funding. Well, guess what?

AmEx received approval earlier this week from the Federal Reserve to become a bank holding company, which is a similar structure to traditional commercial banks. The credit card company now has access to financing from the Fed and the ability to grow a large deposit base.

The company is said to be asking the government for an investment, according to a report in The Wall Street Journal citing unnamed sources. A spokeswoman for AmEx declined to comment, and telephone calls to the Treasury Department, which is running the $700 billion financial bailout program, did not immediately return telephone calls.

The increased funding opportunities through government programs, including the potential $3.5 billion investment, could be a huge boost to American Express as one of its primary sources of funding has nearly disappeared amid the ongoing credit crisis.

American Express relied on packaging pools of credit card debt and selling them to investors in the securitization market. As investors have shied away from purchasing all but the safest forms of debt, the market for credit card-backed securities has dwindled.

American Express is also facing a slowdown in the broader economy, which has led to more customers missing payments and cutting back on spending, hurting the company's profitability.

I can see a congo line way off in the distance of well-dressed executives making their way to Washington, D.C.

Why Bankruptcy Is the Best Option for GM

From the WSJ: Chapter eleven is the most practical course for General Motors and for taxpayers:

GM has about 7,000 dealers. Toyota has fewer than 1,500. Honda has about 1,000. These fewer and larger dealers are better able to advertise, stock and service the cars they sell. GM knows it needs fewer brands and dealers, but the dealers are protected from termination by state laws. This makes eliminating them and the brands they sell very expensive. It would cost GM billions of dollars and many years to reduce the number of dealers it has to a number near Toyota's.

Foreign-owned manufacturers who build cars with American workers pay wages similar to GM's. But their expenses for benefits are a fraction of GM's. GM is contractually required to support thousands of workers in the UAW's "Jobs Bank" program, which guarantees nearly full wages and benefits for workers who lose their jobs due to automation or plant closure. It supports more retirees than current workers. It owns or leases enormous amounts of property for facilities it's not using and probably will never use again, and is obliged to support revenue bonds for municipalities that issued them to build these facilities. It has other contractual obligations such as health coverage for union retirees. All of these commitments drain its cash every month. Moreover, GM supports myriad suppliers and supports a huge infrastructure of firms and localities that depend on it. Many of them have contractual claims; they all have moral claims. They all want GM to be more or less what it is.

And therein lies the problem: The cost of terminating dealers is only a fraction of what it would cost to rebuild GM to become a company sized and marketed appropriately for its market share. Contracts would have to be bought out. The company would have to shed many of its fixed obligations. Some obligations will be impossible to cut by voluntary agreement. GM will run out of cash and out of time.

It also seems that bailout fever has caught on up in Canada too: An Ontario premier has been pushing prime minister Stephen Harper to provide assistance to the province's car industry

Sunday, November 16, 2008

Social Security Disability--Your Tax Dollars at Work

You just wait till Democrats start fattening up all of those entitlement programs they are so fond of in order to garner votes.

HT: Liberty Pen

Cartoon of the day

HT: Carpe Diem

Saturday, November 15, 2008

Compassionate conservatism hurts

I watched President Bush give this speech at the Manhattan Institute on Thursday. He praised capitalism quite a lot and it was very inspirational to some degree. Except that the size of government has ballooned greatly under his auspices as President. And the bailout frenzy is certainly an example of big government intervention and not free-markets. Lastly, I find it rather ironic and even amusing that liberals despise his economic policies yet Mr. Bush in many ways has behaved (even if you remove the costs of the Iraq war) like a liberal President--expanding the size of government.

"Compassionate"conservatism has been very expensive.

Friday, November 14, 2008

GM gets on line for some of our money

There was a time when automakers wanted protection from competition and they lobbied government hard for it. This time around they seem to want to protect themselves from risk and the bad decisions that have wrought havoc to their companies. The current national and global economic crisis has created a seemingly legitimate reason for a bailout package for the automakers and also for many other corporations. But taxpayers should not be lulled into believing that a bailout for Detroit is sound policy. The federal government is largely responsible for plenty of Detroit’s ills and much of the legislation currently discussed to be tied to a bailout is politically motivated and not really based on making the companies successful. I say let them file for chapter eleven and then they can restructure their operations just like many airlines have done over the years. And the argument I keep hearing from advocates of a bailout that claim that filing chapter eleven would not work for automakers because consumers would not buy cars of a bankrupt company--this is fallacious; Consumers willingly paid and walked onto planes of bankrupt airlines without a hitch. This madness of bailing out every company that asks must stop.

Thursday, November 13, 2008

Camilie Paglia on Obama's election win

No one knows whether Obama will move to the center or veer hard left. Perhaps even he doesn't know. But I have great optimism about his political instincts and deftness. He wants to be president of all the people -- if that is possible in so divided a nation. His natural impulse seems to be toward reconciliation and concord. The big question will be how patient the Democratic left wing is in demanding drastic changes in social policy, particularly dicey with a teetering economy.

In the closing weeks of the election, however, I became increasingly disturbed by the mainstream media's avoidance of forthright dealing with several controversies that had been dogging Obama -- even as every flimsy rumor about Sarah Palin was being trumpeted as if it were engraved in stone on Mount Sinai. For example, I had thought for many months that the flap over Obama's birth certificate was a tempest in a teapot. But simple questions about the certificate were never resolved to my satisfaction. Thanks to their own blathering, fanatical overkill, of course, the right-wing challenges to the birth certificate never gained traction.

...And why has Obama not made his university records or thesis work widely available? The passivity of the press toward Bush administration propaganda about weapons of mass destruction led the nation into the costly blunder of the Iraq war. We don't need another presidency that finds it all too easy to rely on evasion or stonewalling. I deeply admire Obama, but as a voter I don't like feeling gamed or played.

Read the full piece here.

Step into the way-back machine

Can Reagan Be Elected?

Death and Taxes

A visual guide to where your tax dollars go

Wednesday, November 12, 2008

Thomas Sowell - The Vision of the Anointed

Thomas Sowell on elitists in the media, politics, academia and affirmative action.

HT: Liberty Pen

Market in everything

Ladies and gentlemen, the grocery cart washer!

Less bang for your buck

Food companies have found a way to keep prices low --trimming packages or making containers smaller. Do you feel decieved?

Tuesday, November 11, 2008

Best post I've read today...

From Russell Roberts over at Cafe Hayek:

[T]he Great Depression wasn't caused by laissez-faire.

That doesn't mean that free markets are perfect. Or that you can't have bankruptcies or meltdowns or bubbles or busts. But to get a really spectacular meltdown like we're in the middle of now, for that you need government.

That doesn't answer all questions. I think most of us, like Alan Greenspan and others who have yet to say mea culpa, thought the system had more stability even with all the distortions. We have plenty of work to do understanding how the system collapsed so utterly. Just don't tell me that it's all caused by market forces run amok or unfettered markets.

The basic point that financial markets are actually highly regulated and that manipulating the housing market is one of government's favorite hobbies needs to be on t-shirts, lapel pins, and 3x5 cards for giving out to friends when they explain the Bush years as the last gasp of laissez-faire. A folk song would be nice, too.

Does anybody still think that the bailouts were a good idea?

As big businesses get in line for a hand out, the prospects for taxpayers that are footing the massive bill looks nasty.

Unintended consequences in lithium batteries

The electric-hybrid cars with lithium batteries that we are constantly told should be built and marketed to the public come with an environmental and social cost. Not only is lithium a finite resource, but the people of the communities in Bolivia where the world's largest reserves of lithium lie have great reservations of mining the resource due to environmental concerns and also simple resistance to having, as they say, industrialized countries exploit them for the lithium. In this case it seems that as the Western world tries to move away from oil, in some respects due to the hostility of the nations that have the largest reserves and due to climate change, it also falls into the same sort of trap it desperately wishes to leave behind. It's not easy being green.

Monday, November 10, 2008

Markets in all things

Mini nuclear plants to power 20,000 homes

AIG to get even more funds for bailout

It seems that the tax funds that were set aside for propping up AIG are not enough; the original $123 million package is set to be replaced by a $150 billion package. And then there is the bailout for the big three automakers sitting and waiting to be finalized too. When does the madness stop?

Saturday, November 8, 2008

Do Republicans have a 'Yes, we can'?

From the Christian Science Monitor:

To regain traction, it must re-invent itself as a party of hope and of ideas relevant to a wider range of Americans. To do so, it must reject the partisan conservative media that peddles in political stereotypes and personal venom. It cannot fall into the trap of being only an opposition party whose primary focus is designing "wedge" issues, such as a call for more offshore oil drilling, in order simply to split Democrats.

Right now, a finger-pointing debate has started among Republicans about the mistakes that McCain made in his campaign and George W. Bush made as president. That backward-looking discussion can go only so far. A conservative movement needs forward momentum by employing fresh ideas.

The GOP brand has been reduced to one word – freedom – in the way that the Democrats were stuck with the one-dimensional brand of equality. But if there is one reason for Obama's victory, it is that he seeks to move his party, and the country, toward that classic American brand: opportunity.

If Republicans want a comeback, they could become the loyal opposition that debates Democrats on the best way to create more opportunities for Americans, allowing them to increase their social mobility through hard work and education.

The party can still be for limited government, but a government effective in providing tools to support innovation and entrepreneurship.

Change you can believe in?

The Economist's Cookbook on the Obama/Biden win.

Friday, November 7, 2008

Employee Free Choice Act - Politicians and Principle

Now that Democrats have cornered every branch of government, watch as Unions aggrandize as much power as possible--even if that means standing privacy in voting on it's head.

HT: Liberty Pen

Thursday, November 6, 2008

Democrats ready to reward unions

Congressional Democrats are already trying to move on some of their crony-capitalist ideals by announcing that they intend to double the aid to U.S. automakers. The aid would be included as part of a second stimulus package; the first stimulus package did very little to prop the ailing economy but maybe if they try it again, it might just work, right? Democrats are beholden to union members (a very small portion--7.5%--of private sector workers and responsible for spending $400 million on the election) for their support during this last election, so it is no surprise that such a tasty little aid plan ($50 billion in taxpayer funds) would be brought to the feet of the United Auto Workers and the fledgling car companies. Ask yourself, would Democrats do the same for other industries that didn't pass their ideological muster? A better question is should government be aiding any failed business at the expense of others? We have already seen what the $700 billion bailout has borne out, should our government be allowed to play favorites again?

Wednesday, November 5, 2008

Around the Horn...

Posts and comments of worth regarding yesterday's election:

Jeff Perren at Shaving Leviathan notes that Obama is a hard left liberal.

The Real World on the beauty of the American election.

Bobo at The Bobo Files weighs in on the election and he is not a happy clown.

From Copious Dissent: Ten Reasons to be happy about this election. Excellent!

And finally a pithy comment from Michael Tanner at the Cato Institute:

Yesterday's massive Democratic landslide cannot be seen as anything but a repudiation of George Bush and the current Republican congressional leadership. But to suggest that in electing Barack Obama and a Democratic congressional majority, voters were choosing big-government over small-government would imply that either the Bush administration, the current Republican congressional leadership, or, for that matter, John McCain actually supported smaller government. In reality, by almost every measure, government grew bigger, more expensive, and more intrusive under President Bush and the Republican Congress.

Exit polls show that Republican losses were heaviest among upscale suburban voters who tend to be economically conservative but socially moderate. These formerly reliable Republican voters did not suddenly decide that they wanted a bigger, more expensive, and more intrusive government. But, faced with the big-government status quo or big-government "change," they opted for change.

Republicans now have two more years in the wilderness to decide whether or not they actually stand for limited government and individual liberty. One wonders, whether they will hear the message.

When the election turned

Gallup Poll Daily tracking through much of 2008 showed a tight race between Barack Obama and John McCain. Obama moved ahead at the height of the economic crisis and never trailed McCain after that, expanding his lead in the final month of the campaign.

Barack H. Obama---44th President of the U.S.A.

Well, it's finally over. Barack H. Obama is now the President-elect and on January 20. 2009, he will be sworn in as the 44th President of the United States. Mr. Obama ran an effective campaign and is a very good and clever orator; John McCain simply could not counter Obama's carefully worded political spin, rhetoric, or the popular tide against Republican rule. Now comes the honeymoon period and I expect it to be quite a celebration. It is a historic moment in American History.

After the back slapping and accolades end, it will be back to business and it will be interesting to see how Obama attempts to deliver all his grandiose campaign promises. I doubt that he will and I hope that I am wrong but I have a strong feeling that the government will continue to grow by leaps and bounds at an even faster clip than under George W. Bush. All in all, I do hope that Obama turns out to be a good President for the sake of the country; I hope that he surprises me and doesn't make a hard(er) turn to the left (Jeff Perren comments that he's already there). Otherwise, all the celebrating will be forgotten rather quickly to harder times.

Tuesday, November 4, 2008

Oil Prices v Google Search Volume for "Speculators"

From Mark J. Perry at Carpe Diem. As gas prices fall, the irrational chorus of blaming speculators for gas prices has fallen off...well, until the next price spike.

The Rational Voter?

From Bryan Caplan's "The Myth of The Rational Voter:"

Aristotle says that "all men by nature desire to know," but that is not the whole story. It is also true that all men by nature desire not to know unpleasant facts.

Much of the time, both motives are at work. The human mind has mixed motives: people want to learn about the world without sacrificing their worldview. Investigating only the first motive yields a distorted picture of the way we use our heads.

And with that, we head off to the polls today. Happy voting, folks.

We are all Keynesians Now

A second stimulus package is gaining support in Congress even though the first one did little to spur the economy. Expect this same sort of Keynesianism to be at the fore of American economic politics for some time.

Monday, November 3, 2008

Dixville Notch has spoken: It's Obama in a landslide

The first results are in. The little hamlet of Dixville Notch has decided:

Democratic presidential candidate Barack Obama emerged victorious in the first election returns of the 2008 presidential race, winning 15 of 21 votes cast in Dixville Notch, New Hampshire. People in the isolated village in New Hampshire's northeast corner voted just after midnight Tuesday.

It was the first time since 1968 that the village leaned Democratic in an election.

Obama's rival, Republican John McCain, won 6 votes.

A full 100 percent of registered voters in the village cast ballots. And the votes didn't take long to tally.

The town, home to around 75 residents, has opened its polls shortly after midnight each election day since 1960, drawing national media attention for being the first place in the country to make its presidential preferences known.

Best post I've read today...

Jeff Perren over at Shaving Leviathan comments on Barack Obama and his derisive stance on the coal industry while shunning nuclear power as a viable alternative to meet our energy needs of the future:

Once again, the goal is to use the power of government to rush ahead of the market to create a 'clean' source of energy. The cover story for this is to usher in a new age of energy production with no alleged downside: solar, wind, biodiesel. The fact is, that all these have significant drawbacks both economically and environmentally.

Beyond that, they have one major drawback that no one knows how to overcome yet. They don't exist, not on anywhere near the scale that would be required to replace coal as an energy source. (Coal is used to power over 48% of all U.S. electricity production.

The only viable replacement for coal, and it's a superb one both from the standpoint of cost and pollution, is nuclear fission power plants. That technology is safe, cost-effective, and well-developed. There are also immediately deployable improvements that would make it lower cost, safer, and provide for long-term energy supply.

Milton Friedman on FDR and Social Security

HT: Liberty Pen

Sunday, November 2, 2008

Saturday, November 1, 2008

Power of the Market--Individuals vs. Government

This is a excellent clip from Milton Friedman's "Free to Choose." There is a section on a small mailing company (before Federal Express or UPS) that attempts to fight and compete against the government backed U.S. postal service. Guess what happens?

HT: Liberty Pen