Political Charade and Deregulation

Thomas Sowell on the housing crisis:

The word repeated endlessly in these political charades is "deregulation." The idea is that it was a lack of government supervision which allowed "greed" in the private sector to lead the nation into crises that only our Beltway saviors can solve.

What utter rubbish this all is can be found by checking the record of how government regulators were precisely the ones who imposed lower mortgage lending standards— and it was members of Congress (of both parties) and who pushed the regulators, the banks and the mortgage-buying giants Fannie Mae and Freddie Mac into accepting risky mortgages, in the name of "affordable housing" and more home ownership. Presidents of both parties also jumped on the bandwagon.

Social Security and Medicare hit the fan

Oh crap! Social Security and Medicare are in trouble. Again. What a surprise. I'm so caught off guard. Can I have all the money I paid into these ponzi schemes back now? I wonder how in the world Obama thinks that he is going to fund a single payer national health care plan AND solve the Social Security/Medicare financial debacle? This is going to get very interesting.

Why did Rothbard so love Turgot?

Anne-Robert-Jacques Turgot (1727–1781) understood government regulation better than some modern day economists.

President Obama's Deferral Proposal: Hamstringing American Companies, Reducing American Jobs

The latest video from Dan Mitchell and the Center for Freedom and Prosperity Foundation highlights the issue of Obama's proposal to severely restrict the "tax deferral" for American companies trying to earn market share in other nations. My favorite line by Dan Mitchell in this video regards politicians and tax revenue: " Politician's love tax revenue, it's like crack to them."

Industries Push for Free Pollution Credits

Let the lobbying begin! (Horn blast!) We can plainly see that there will be government chosen losers and winners right from the very start of any legislation capping greenhouse-gas emissions. And the biggest losers will be the American taxpayer whom also will lose mightingly when it comes time to consume energy.

Ron Paul vs. Bernanke

Watch as Ron Paul poses some very incisive questions and comments to Ben Bernanke during a recent congressional hearing. Also notice how Bernanke, a very intelligent and learned man, simply does not understand that he is part of a government bureaucracy that is slowly dragging the American economy into the hands of big government power.

Obama Motors!

So, we have Obama's word (whatever that's worth to you) that the government will back GM warranty's. Oh, that is just super.

Don't Turn America Into Another France

A simple plea from a pretty French economist.

Barney Frank: "What housing bubble?"

Before the financial crisis, many members of Congress cheered subprime mortgages simply because they aptly served affordable housing goals. In this video, we see Barney Frank running interference for mortgage giants Freddie Mac and Fannie Mae several years before the feds had to step in to save them.

HT: SBVOR

China vs USA: A Visual Comparison

Data from the CIA World Factbook.

Obama's $100 million budget cut

HT: The Bobo Files

He really was more of a Democrat

Spector switches party. Is anybody really surprised? I'm not. Politicians look out for themselves and their elected office. They will see which way the wind is blowing and they act accordingly. This is another example of how citizens should never trust politicians or government.

Study: Low-Carbon Fuel Standards Are Unlikely to Reduce Warming

In the New York Times

How To Rid Government Corruption!

Cartoon of the day

The REAL pirates!

HT: SBVOR

Why You've Never Heard of the Great Depression of 1920

This is a long video--50 minutes . However, if you are interested in economic history and specifically the Great Depression, you should enjoy this.

It’s not easy being Green

On Friday, the Obama administration declared that carbon dioxide (including five other industrial gases) was a grave danger to human health and a threat to the environment. The regulatory agency that will be in charge of crafting environmental regulation will be the Environmental Protection Agency. However, I surmise that it will probably be Congress that creates some sort of all encompassing environmental legislation. This is the moment that environmental groups were waiting for and it is for them a major step into crafting a "green" economy. This is huge. This ruling means that everything that you consume or purchase will essentially become more expensive--EVERYTHING. Congratulations, my dear taxpayers, our nation is now off to a new economic experiment that will never pay off and will bring grimaces of pain when citizens have to settle the bill.

By the way, the "green" experiment of ethanol hasn't worked out well at all yet our government will continue to subsidize it till someone notices the huge money pit that it is. Despite the fact that ethanol plants are closing all over the country, our government wants to mandate even more ethanol use. Of course, this means that the taxpayer remains on the hook to benefit ethanol producers and the states that have them.

Raising Taxes Explained...

This one minute video clearly explains why raising taxes during a recession is not good policy.

The Burden of The Tax Code

Free Audio Downloads

Lovers of freedom, check out this website for a free audio download of Frederic Bastiat's "The Law." Now you can listen to Bastiat's classic while driving in to work instead of the corny shock jock radio.

Quote Of The Day

"I am suspicious of all the things that the average citizen believes."

H.L. Mencken

Big State Government Now Wants Your T.V.

You see we need to save energy because too much energy usage makes the power plants burn more fossil fuels which we know pollutes the earth and causes Global Warming. If we don't stop Global Warming, we will find ourselves underwater or starving or destroyed by killer weather just like that realistic movie, "The Day After Tomorrow." So, your T.V. needs to be regulated. It's for the greater good.

California state regulators, who have limited automobile emissions and required large utilities to increase use of renewable energy, now are taking aim at a ubiquitous household item - the television.

Consumer demand for bigger, flatter and fancier TVs has dramatically increased the amount of energy needed to watch the tube, officials say. The California Energy Commission says a 42-inch plasma television uses more energy than a large refrigerator...

To reduce the electrical draw from TVs, the commission has proposed the nation's first mandatory energy limits on televisions - limits that many large LCD and plasma TVs on the market do not meet.

"We want to get rid of energy-guzzling televisions," said Adam Gottlieb, spokesman for the state energy commission.

The proposed rules would take effect from 2011 to 2013, eventually cutting the use of power by 50 percent.

How long before this idea goes federal?

Dan Mitchell's Makes His Case For Tax Haven's on Capitol Hill -- Part 1 & 2

"The only way competition is harmful is if you're a monopolist or an oligarchist and you don't like when there are competitors that are threatening your secure little position in life."--Dan Mitchell.

Happy Birthday, Thomas Jefferson!

Jeff Perren reminds us that today is Thomas Jefferson's birthday

Taxes and Fees. oh my!

Aside from raising taxes while accepting stimulus funds, cities around the country now want to tag citizens with an array of "fees." If you accidentally smack your car into a pole and police and firefighters show up, expect to receive a bill from the city.

The Dow And Party Control

From The Club For Growth.

Less of a "Live Free Or Die" State Soon.

"New Hampshire is one step closer to having a mandatory seat belt law."

Obama Wants To Monitor Your Internet

Rod Williams over at A Disgruntled Republican notes that the Obama administration intends to revive a Bush administration program that mines the internet for data linked to possible terrorist acts. My question is where are the loud protests? Where is the outrage over this that we witnessed from the Left when Bush tried to implement this very same program? Since Mr. Obama is a beloved liberal democrat, is he going to get a free pass on this power grab? Maybe everyone is being distracted by the new dog.

Much credit is given to Nelson over at the Liberal Journal for tackling this issue.

"Deficits Don't Matter."---Dick Cheney

While Obama cites "signs of progress" in the economy, the national deficit swells.

Salazar and Off Shore Drilling take center stage

Will it be possible for environmental groups and the oil industry to find a middle ground to pave the way for exploration off the coasts of the U.S.? We are going to find out soon enough. Interior Secretary Ken Salazar is opening up the debate for the next six months and I expect the usual rhetoric from environmental groups who detest any drilling whatsoever; they will claim, as usual, that not enough is being done to encourage alternative fuels and development of already-leased federal lands--all which is a bunch of crock. Democrats will invariably find a means to subsidize "renewable" energy by taxing the oil companies if they are allowed to drill under new leases. And as we found out last year, some leased lands or off shore parcels aren't worth drilling because of the high cost or there is little oil to extract.
I have a wait and see attitude on this because I remember how last year the Democrats led by Nancy Pelosi released a 290-page bill on "off shore" drilling--they pushed it through less than 24 hours later, 236-189. "Closed" rules prohibited the GOP from offering alternatives. And the bill was a porker with little prospects of any real off shore drilling. I wonder what this administration up to? I'm suspicious.

I received an e-mail from the intrepid Jane Van Ryan over at the American Petroluem Institute informing me that Secretary Salazar will be in my neck of the woods--San Francisco, California--on Tuesday, April 16th to hold a public hearing on offshore drilling. Oh boy, I expect the protests to be colorful and cartoonish. Here is an excerpt from Jane's informative e-mail:

To give you some background, the Minerals Management Service (MMS) – the federal agency responsible for administering the offshore oil and natural gas program – considers the size, timing, and location of the areas to be considered for federal leasing, and it bases its recommendations on the public’s comments. Although a five-year plan approving increased offshore drilling was released in January, Sec. Salazar directed Interior Department scientists to produce new reports on how much oil and gas might be found off the Atlantic and Pacific coasts and extended the public comment period to September. Regional hearings like the one in San Francisco are part of that public comment period.

We expect that anti-drilling groups will mobilize their members to make up the majority of comments at the San Francisco hearing, but I wanted to let you know that you and your readers can submit comments to MMS electronically, if desired. This link will direct you to a page on our Web site where you can learn more about the MMS five-year plan and click-through to submit a public comment. In addition, the page has several resources for bloggers, including a blog badge and an interactive widget that will allow you to identify your Congressional representatives, find them on Facebook, Twitter and YouTube, or simply send them an e-mail.

So, if any of you are interested in making your voices heard on this issue, this is a good forum to exercise your viewpoint. This country is going to need more energy to power its economy as time goes on--wind mills, solar panels, and bio-fuels will certainly not replace fossil fuels anytime soon. We need to use the resources we have available to us in our own country to keep energy inexpensive and to create jobs. Now is the time to make your voice heard.

TSA harrassing Ron Paul supporter

A message from Campaign For Liberty about the above video:

Dear Friend of Liberty,

Campaign for Liberty’s very own Steve Bierfeldt has become an unexpected Internet sensation -- and the latest target of over-reaching federal government agents.

You see, Steve was detained by Airport Police and TSA officials shortly after the Campaign for Liberty regional conference in St. Louis.

The officials rudely berated and harassed Steve for 30 minutes in a secluded room at Lambert-St. Louis International Airport. Fortunately, Steve was able to record nearly all of the interrogation with his cell phone.

Steve’s alleged “crime”? Carrying $4,700 in checks and cash from Campaign for Liberty, along with various other materials from our conference.

The local and Federal agents harassed Steve. They were belligerent, cursing and using insulting language. They threatened to turn Steve over to the DEA and the FBI, all the while refusing to inform him of his legal rights or explain how cash and checks threatened airplane or airport security.

Throughout the interrogation, Steve remained polite but resolute and declined to answer the invasive questions without an adequate explanation from these federal and local agents as to why they needed to be answered. Without telling Steve what law he was accused of breaking, they continued their harassment.

Although they grew increasingly frustrated that he remained committed to exercising his rights, intervention from another officer eventually led the police to reluctantly release Steve.

Last Wednesday, Steve appeared on Judge Napolitano’s Freedom Watch to discuss the flagrant violation of his rights and to promote the importance of each of us defending our civil liberties...

Steve’s ordeal is a reminder to all patriots that liberty is constantly under fire, and we must remain vigilant and prepared to stand up for our rights.

Cap and Trade Loses in Senate

You may have missed this since the main stream media is too busy covering Obama's European tour; it seems that the cap and trade scheme that Obama and environmentalists have been pining for has hit a snag in the Senate; Democrats will not be able to ram it through with a simple majority. Senators from manufacturing states, even Democrats, know that the cap and trade scheme would be a major blow to their base and the 2010 mid-term elections aren't that far off for constituents to forget how some Senators voted away their economy--they obviously know where their bread is buttered.

The above chart provided by the Heritage Foundation.

Cartoon of the day

Corporations That Donate

From Forbes.com here are the top ten corporations that make cash donations to charities. Note that some of these are companies Progressives/Liberals love to hate:

Walmart: 301 million

Bank Of America: 211 million

ExxonMobil: 173 million

Citigroup: 146 million

Johnson and Johnson: 127 million

Chevron: 122 million

AT&T: 119 million

General Electric: 114 million

Microsoft: 110 million

Wachovia: 103 million

Is a Bailout of the FHA on the Horizon?

This may come to pass soon:

WASHINGTON (AP) — The number of troubled loans backed by the government's mortgage insurance program is on the rise as economic problems mount, and lawmakers are worried that taxpayers will be stuck with the final bill.

Sen. Kit Bond, R-Mo., warned Thursday that the Federal Housing Administration is a "powder keg" waiting to explode, and said the Congress and the Obama administration shouldn't place a greater financial burden on the already strapped agency.

Defenders of the Community Reinvestment Act claim that since the CRA has low rates of defaults, due to a rigorous application process, it is therefore not to be blamed for the housing debacle. I always counter that the CRA has some defaults, albeit small, and that this is enough of a reason to question the merits of the program since taxpayers end up footing the bill for any losses no matter how small. I see the current dilemma with the FHA as being a very similar case as the CRA; good and noble intentions gone awry as the taxpayer foots the bill. BTW, this isn't the first time that the FHA has had financial issues.

China--Please, don't buy our debt!

"The 'independent' Federal Reserve will monetize the debt by buying Treasurys in the open market with money created out of thin air."

Mr. Sanchez, it is not all about Greed

Don Boudreaux of Cafe Hayek responds to Rick Sanchez of CNN regarding this program:

Here's a letter that I sent a couple of weeks ago to a CNN on-air personality:
16 March 2009

Mr. Rick Sanchez, Host, CNN NewsRoom

Dear Mr. Sanchez:

Re your interview today with economics students at Georgia State University: when a young man said that he is skeptical of government regulation and that he values individual liberty, you derisively accused him of believing that the economy would work well "without any rules."

The smug assurance of your accusation reveals your gross misunderstanding of the case for free markets. That case is not that rules are unnecessary. Rather, it's that rules written by politicians and enforced by bureaucrats generally work much less well than do rules that emerge decentrally - rules that evolve from the voluntary interactions and successes and mistakes of individuals each pursuing his or her own goals without being herded by a central authority - rules that are enforced by competition and by the exercise of personal responsibility and that, when sufficiently important, become formalized in case law declared by courts.

The distinction between what you think of as rules and the kinds of rules that permeate successful market economies is perhaps subtle. But it's also real and important. You should try to grasp it.

Sincerely,
Donald J. Boudreaux

I must say that Prof. Boudreaux was succinct in his observation and comment.

Best April Fool's Joke on Liberal Bloggers?

The Bobo Files pulled a fast one.

Climate Change Reality

This just in--Al Gore has recanted his stance on Global Warming. Mr. Gore has said recently: "I have, after much studying of the scientific evidence, concluded that there isn't enough hard environmental evidence to support the theory of Global Warming. There are simply too many variables to take into account and several decades worth of data is simply not conclusive." Mr. Gore finished his statement by saying that he was going to turn his attention to alleviating the very real threat of poverty and hunger that continues to afflict the very poor of the world. APRIL'S FOOL!! I really had you going on that one, eh? Al Gore wouldn't come to his senses if an iceberg hit him on the head.

The Cato Institute published this full page ad in various newspapers around the country back in November, 2008. Since the Obama administration is now ready to get into the auto business and it is clear that it will push expensive "green" mandates--hybrid cars and a cap and trade scheme--it would be nice if "Mr. Pragmatic" would actually act like a pragmatist and be concerned with practical consequences and not political expediency or tendentiousness.

Gov. Kathleen Sebelius: Tax Cheat

Another Obama nominee that has issues figuring out taxes: Gov. Kathleen Sebelius.

IRS Agent Cheats on his Taxes

Does this mean that he's involved with the Obama administration? Har! Why am I not surprised by this one.

Milton Friedman - Government Regulation

Even in his 90's, Friedman was still a force.

HT: Liberty Pen

Union Members vs. The Union

You won't see this on CNN or Keith "fathead" Olberman's show. Oh, the irony when union members picket their own union for unfair practices.

GM: Government Motors

The move to oust GM CEO Rick Wagoner by the Obama administration is yet another masterful stroke towards economic populism; the federal government will now apply copious political pressure to corporations and companies that bristled happily when it came time to accept bailout funds--har! har! har!--little did they know that were essentially making the federal government their hard taskmaster and overseer. The lesson is clear: Don't take tax dollars from the government. They will bend and twist your company to satisfy its political ends while making a public hanging of you and your management. Score one for Team Obama since this whole sorry episode is a clever cover for the White House to dump more public funds to the automakers with little public resistance or scrutiny. After all, getting rid of a bad CEO (aren't they all unpopular now?) in a very public manner appeases populist sentiment against the bailouts for a time.

I will repeat my call for no bailouts for auto companies: Let them go chapter 11. We could have avoided this whole mess if they were simply allowed to go bankrupt months ago.

More Bailouts Please!!

Since we have lost our minds bailing out every industry with enough pull in Washington to garner attention, let's continue with the bailouts! The newspaper industry needs a bailout because papers are going under fast. We really need to save them, right? Then there is the auto suppliers; they are a sick industry with lot's of union workers--we must bail them out because as Lo Dobbs always points out, we need more American manufacturing. Whoopee! And then there is the commercial real estate industry. Boy, those guys are hurting. We need to bail them out too. Too much credit card debt? Bailout. Bought too much car? Bailout. Your idea to sell rain suits on a sunny day cause you to go bust? bailout.

Watch as our government picks winners and losers according to how connected they are to a dear interest group or lobbying firm. Sweeet! Everybody move along. Everything is perfectly fine. The bailouts will help; it is times like these that government can give a "leg up" to the distraught and ailing. And besides, think of all the Green Jobs coming down the pike. We are so lucky.

Neighborhood Car Dealers Faltering

Perhaps Congress needs to work on a bailout package for car dealers. Why not?

Government Intervention, Regulatory Policy, and the Financial Crisis

When you hear the populist pabulum that deregulation was the prime cause of our financial crisis, take a pause and note that it is in a politician’s best interest to regulate industries because it places power and influence in his or her grasp. The opportunity for power coupled with a public outcry to "do something" is too great to resist.

Also, have you noticed that all the banks that have over-leveraged themselves are also the most highly regulated?

The Stimulus Plan---OUCH!

Brothers At War

Tasha's Take and The Bobo Files brought this movie to my attention: Brothers At Arms. A civilian embeds himself in a platoon serving in Iraq. Except that this civilian is a soldiers brother. Check the trailer out when you can.

Glenn Beck: On The Coming Inflation Crunch

Since the Fed has decided to devalue our dollar by printing money, look to a run on commodities like oil, gold, and copper. The coming inflation will crush the middle class and this country will be in a economic malaise for years.

HT: Liberty Pen

Chris Dodd Lied!! What a Surprise!!

He who is the defender of Fannie Mae and Freddie Mac, he who has been the recipient of favors from Countrywide; Yes-siree! For years Mr. Dodd has pulled a fast one on the American taxpayer, running interference for Fran and Fred as both institutions made risky bets on mortgages that were made to people that could hardly make the mortgage. Mr. Dodd successfully deflected any real criticism of the mortgage giants while the populace reveled in the collective heat of Bush hatred and as it fell under the spell of silver tongued Barack Obama.

Does it stop there? No! Mr. Dodd took it upon himself to insert the loophole that allowed bonuses to AIG executives. When he was first asked by CNN whether he had inserted the loophole—Dodd said NO! Later he recanted on CNN! I swear that you could not make this stuff up! Incredible!

BTW, Dodd's darlings--Fannie Mae and Freddie Mac are going to give out fat bonuses too. Hee..heee!

Update: Chris Dodd blames Obama administration for bonus amendment. I bet that the White House knew of the loophole; This means that when Obama tells us that he's "upset" about the bonuses to AIG employees he is basically lying and faking it--the man signed the stimulus package. And since we are constantly told that he is so "smart" he knew what was in the package. Democrats are running around feigning anger since they have realized that they rushed the package through and defended not having read through it; Americans are falling for this whole scam hook, line, and sinker.

The Fed Wants To Print More Money!

Can you say INFLATION? I have visions of the inflationary period during the 1970’s with double digit inflation. Remember those days? It won’t be pretty or fun. Ah, Jimmy Carter here we come! Does anyone want to make the case that the Fed is an independent institution that is not influenced by politics?

Sweden Chooses Voucher Program for Its Schools

The highly socialized nation of Sweden entrusts Milton Friedman’s idea of the voucher system. And guess what? It works.

Say it ain't so Obama!

AIG contributed $101,332.00 to Barack Obama's presidential campaign. What's Obama going to do now? Give the money back? So much for credibilty.

Mexico to raise tariffs on U.S. exports

Let the trade wars begin! Thank you Obama!

John Stossel slams Bailouts and Other Government Programs!

John Stossel blows holes in all of the banter and tripe regarding bailouts. Democrats and big government supporters that back the bailouts will not like this video series. This is part one of six videos. Click here for the rest of the videos.

Ask yourself this: would you trust Maxine Waters with your hard earned money?

So, Obama is Outraged, eh?

The whole ruckus concerning AIG bonuses to employees could have been avoided completely if the federal government would have taken some Hayekian knowledge (I know, utterly impossible) and not dumped billions of taxpayer dollars into AIG in the first place. I posted the folly of using taxpayer funds to prop up failing private institutions here, here and here. But whether its the auto companies, investment banks or insurance companies, executives of these corporations are learning the hard way (this is not a bad thing) that receiving funds from the federal government doesn't come without strings attached; politicians will use every possible political angle to make themselves while publically whipping the corporations that they are attempting to "save" in the first place. Simply, the government should never have offered to "save" AIG and AIG should have done the noble deed and filed for bankruptcy. But nooooo..."they're too big too fail." The American public was told that if AIG fails, then a horrid domino effect will take the entire U.S. financial sector down with it--what a bunch of crap. Like the last two stimulus packages, Americans fell for it hook, line and sinker.

BTW, wouldn't it be just grand if we didn't have to be subjected to the bloated rhetoric of Austan Goolsbee.

Obamanomics

HT: Carpe Diem

Mmmmm...Beer!

American small breweries are another example of the free-market at work; it enables innovation, choice, and quality.

Unemployment Hits 8.1%

Anyone want to bet it goes higher? With Obama constantly threatening investors and the stock market in a funk, I doubt that the stimulus package is going to knock off more than 1-2% off the unemployment rate. If it does, the unemployment rate will be in the double digits and any positive effects of the stimulus will go largely unnoticed.

Dan Mitchell Slams Obama Budget Plan

When they figure out that they can't pay for all of their bloated programs by taxing "the rich," the middle class tax payer is next in line. You should get ready for it.

Obama's Shock Doctrine

Cato Daily Podcast

"You never want a serious crisis go to waste."----Rahm Emanuel

Where is Naomi Klein hiding these days?

More Taxpayer Funds Down The Drain

Here we go again. For crying out loud! Does anybody really believe that this is going to work? This is all like a bad dream.

Mankiw vs. Krugman

Speaking of Greg Mankiw, it looks like Mankiw has thrown down the gauntlet: He wants to make a wager with liberal economist Paul Krugman on just how much the economy will grow (or how not) under the auspices of Obama's economic plan. Liberals love to back up their economic arguments with Krugman's critique of free-market capitalism; they figure that his recent Nobel Prize lends plenty of weight to their economic policies. But I always point out that Krugman's Nobel Prize winning work was in international trade and not macro-economics: He's basically a Keynesian when it comes to macro-economics. And there is far too much empirical and historical evidence that shows that Keynesianism doesn't provide the robust growth that our country needs to maintain our standard of living. I would love for Krugman to take Mankiw's bet.

Obamanomics and the Dread of Inflation

Greg Mankiw posted the growth forecasts from the Obama administration (in Red) and a competing forecast from a group of private economists (in Blue). It should be no surprise that the Obama administration forecasts are far more optimistic that the "Blue Chip" private forecasters; administrations are notorious for forecasting rosy scenarios when their economic plans are concerned; politics is a strong influence and the Obama regime is no different than other administrations before it.

2009: -1.2% -1.9%
2010: +3.2% +2.1%
2011: +4.0% +2.9%
2012: +4.6% +2.9%
2013: +4.2% +2.8%

Needless to say, I agree with the sober forecast of the private economists. If and when the economy does have some growth, it will be slight and hardly robust due to the massive spending in the public sector. In my opinion, the biggest threat to the economy will be high inflation once there is a return of confidence and some GDP growth. The M2 money supply has been growing at a pace that has never been seen before--the printing presses are working hard printing money in order to pay for all of the bailouts and for Obama's kooky stimulus scheme. This will not end well.

California unemployment rate hits 10.1%

"As California goes, so does the nation," is the saying around here. Decades of liberal economics have crippled the Golden State. Now we have a progressive President and a very liberal Congress. Notice how many powerful Californians--all Democrats--there are in Congress: Nancy Pelosi, Henry Waxman, George Miller, Jane Harman. If the Californian economy is a litmus test, you can bet that it will not end well for the country in several years.

A Small Lesson on Government Regulation and Beer

When the federal government stepped out of the way of DIY home brewers, the micro-brew industry quickly grew with all of its innovations and large array of tasty choices. Another example of how less government means more freedom and prosperity.

Cato Scholars Address Obama's First Address to Congress

This is a far better critique of Obama's address to congress than CNN, NBC, or any other mainstream media outlet I watched on Tuesday; I am appalled at how CNN rarely is critical of Obama and his economic policy.

The 10 Most Crazy Government Subsidies

Aren't you glad you pay taxes for this sort of stuff?

HT: Andrew Roth

Here Come Some Taxes

Here it comes---higher taxes and a cap and trade carbon scheme! It is just what our economy needs. I'm starting to seriously believe that Obama doesn't know what he is doing. When Obama calls for raising taxes on "the wealthy," you should know that this really means small businesses. The cap and trade scheme is a massive tax increase.

House passes Omnibus bill

$410 billion worth of spending and this includes about $5 billion in earmarks. Can you smell the bacon?

TARP Is Ripe For Fraud

Now don't you all worry your pretty little heads about government bailouts or "stimulus" packages because you should feel that your tax dollars are going to be spent efficiently and wisely. Afterall, if you can't trust the government who will you trust? (Snicker, snicker.)

The U.S. government's rescue of the financial system is vulnerable to fraud that could potentially cost taxpayers tens of billions of dollars, government watchdogs warned lawmakers Tuesday.

Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program, told a House subcommittee that the government's experiences in the reconstruction of Iraq, hurricane-relief programs and the 1990s savings-and-loan bailout suggest the rescue program could be ripe for fraud.

He also said fewer than 5% of banks receiving government aid have responded to a request about what they have done with their bailout money.

The comments come as the Obama administration prepares to pour more money into the financial sector. Federal banking regulators begin a series of "stress tests" at the largest U.S. banks this week to determine whether they need greater infusions of government funds to survive a worse economic downturn.

Stimulus Today, Disaster Tomorrow

At best, the stimulus package may be able to stave off 1-2 percentage points off the unemployment rate. But I certainly don't expect it to generate 3-4% GDP growth which is the kind of growth needed to sustain our standard of living with population growth. I expect a very meager and weak recovery at best. Obama plans on letting the Bush tax cuts lapse which during a soft economy is a recipe for trouble. One thing is certain--the massive debt will create rising inflation. And it will eat into the value of dollar and it will make a strong recovery elusive. We are headed for some tough times.


HT: Liberty Pen

Democrats and Deficits

Remember all the flack and hate that Democrats and liberals generated when Dick Cheney uttered these words: "Deficits Don't Matter." Well, now that they have one of their own in the White House and Democrats control both houses, it seems that they have forgotten their bitter arguments against growing national deficits. Now it's "spending is stimulus!" If government spending is good for the economy, why wasn't it good when the Bush administration was doing it? Now that Democrats have abandoned the charade of fiscal responsibility and "pay as you go" (remember that bull crap) they have unveiled a new and bigger fiscal budget for 2009 and it's an 8.7% increase from the 2008 budget. Despite Obama's jawing about "fiscal responsibility" and cutting the deficit in half by his first term, taxpayers should brace to get socked with higher taxes in the very near future. Sadly, this is exactly the sort of change that I expected from Barack Obama.

Glenn Beck: Road to Socialism

Bailouts and nationalization. Mmmm.

David Boaz: Roosevelt v. Reagan on CNBC

The Insanity of it all...

If you haven't heard the news, Obama plans on a $275 Billion dollar housing bailout.

Jeff Perren at Shaving Leviathan writes:

The insanity continues unabated.

Fresh from signing the largest legislative suicide pact in American history, Obama plans to intrude the Federal government still more into the housing market, amplifying the bad effects of the intrusions that led to the crisis by engaging in still more Federal welfare...

...explicit discussion of moral issues plays little part in public debates these days, even though it animates most of them. Instead, they focus almost exclusively on which route will maximize social utility and an abstraction called "the economy." They too frequently ignore that individuals have their own private economy and that should be the heart of their concerns.

Whenever moral issues do play a part in online debates, they tend to center around the personal motives of Congress and Obama himself. But it doesn't matter whether they are the accumulation of more power, as is likely, or simply a sincere belief that 'the strong' should help 'the weak'. It's irrelevant whether or not he and they are simply soft-hearted, to go along with their soft heads, or are just a bunch of calculating opportunists.

The effects will be the same regardless of their intentions and the first effect is to violate the right of dozens of millions who didn't default on their mortgage payments to choose whether or not to help the others.

The entire post is spot on. In the long run, Obama's plan to shore up struggling homeowners is close to removing risk from the housing market. Hey, don't worry if you can't pay your mortgage because Uncle Sam will always have your back. Eventually, it won't matter what your reason is to not pay your mortgage because you have a "right" to have a home. Right? I can see some angles here, Fannie Mae and Freddie Mac get some validation by being injected with 200 billion dollars; they both can rest assured that they will never have to compete with others or fear poor performance since their stockholders are the American taxpayer. Yes, even responsible taxpayers that avoided personal debt and "too good to be true" mortgage payments get to pitch in for this transfer of wealth.
Alas, another market distortion gets to be created. Home prices will once again be adversely "stimulated" by the lumbering forces of government trying to "do something." All of this will not end well. I can almost feel unintended consequences creeping up behind us.

Better than a fake stimulus...

Where your money will end up

The WSJ has a neat and simple graph. Look carefully at the tax cuts and what the biggest portion is aimed at. Do you remember the Economic Stimulus Act of 2008 and how it flopped?

We could all use less Keynes and more Hayek

Dick Armey writes in the WSJ:


It's clear why Keynes's popularity endures in Congress. Intellectual cover for a spending spree will always be appreciated there. But it's harder to see any justification for the perverse form of fiscal child abuse that heaps massive debts on future generations...

Of course, despite Mr. Obama's campaign promises to adhere to "Pay As You Go" budgeting, no one seems terribly worried about paying for what will likely be a trillion-dollar stimulus package. What everyone should agree on is that the money has to come from somewhere, either through higher taxes, borrowing or printing...

If the government borrows the money for the stimulus, then it will either have to print money later or raise taxes to pay it back. If the government raises taxes to pay for the stimulus, it will, in effect, be robbing Peter to pay Paul. If the government prints the money, it will increase inflation, which will decrease the value of the dollar. That would, in effect, rob Paul to pay Paul back with devalued currency...

Taking money out of the private economy -- either through taxes or inflation -- and spending it in a way that doesn't offset the loss of money with real economic gains is worse than doing nothing...

There is no way around it; this stimulus bomb is going to create inflation like nobody's business and it will do little to move the economy forward.

The People's Stimulus: Get Your Money Back

Here's a good idea for economic stimulus.

HT: Cafe Hayek

The Missing Obama Tax Cut

Promises, promises you can't keep.

Best post I've read today on Geitner and government intervention in the economy.

Do yourself a favor and read this great post. From Jeff Perren over at Shaving Leviathan:

When that disaster comes, and capitalism is blamed once again, there will be increasing pressure for out and out nationalization of the banks, something to which this Administration is already far too philosophically inclined. (Some reports have them mulling it over already and, of course, to a degree, the implementation of TARP has produced that as a fait accompli.)

...But allowing individuals the freedom to succeed or fail is contrary to the entire mindset in Washington, as it is to much of the country on most points of the political compass. Many, far far too many, delude themselves — despite enormous evidence to the contrary — that government control of such matters is practical. This represents the (let us hope, temporary) triumph of large swaths of the Progressive philosophy, made possible in large part by unhealthy acceptance of Pragmatism over the past 100 years.

Unions call for "Buy Canadian" policy

Canadian unions are taking their cue from their American counterparts by calling for a "Buy Canadian" policy. Can you smell protectionism and a trade war? Thank you, Democrats.

Their calls to for a "Buy Canadian" policy come after the federal government lobbied hard against efforts in Washington to attach a "Buy American" policy to a multibillion-dollar bailout program...Last Tuesday, Layton urged that Canada should adopt a "Buy Canadian" strategy in response to the "Buy American" clause included in the proposed U.S. stimulus package.

The Importance of Failure

Tyler A. Watts over at Mises.org writes on the added danger of bailouts that our politicians can not grasp:


I don't buy the probailout folks' predictions of impending economic chaos. But what if they're right? What if the short-run pain in store is just too terrible to endure if we don't start bailing out key industries? After all, we're talking massive unemployment, a new wave of foreclosures, a shrinking economy — in a word, recession. If the dire forecasts of the bailouters are correct, we'd be stupid not to do it; we'd be like a beaver caught in a trap: slowly dying, yet too timid to chew off his own foot to escape.

Capitalism depends on three highly complementary, yet distinct, institutions: prices, property, and "profit and loss." Classical-liberal economists have demonstrated the essential role of these pillars of prosperity for centuries. These fundamental institutions of the market economy are like legs of a stool. If we gradually weaken one leg, we will eventually bring the stool toppling down — economic collapse.

In this light, the implications of bailout are clear. Bailouts are designed to insulate people from the effects of bad decisions. When market prices change dramatically, exposing yesterday's poor investment choices, bailouts come "to the rescue," promising those left holding the bag that they won't have to endure the full cost of their errors...

...Bailouts, then, attempt to erase the effects of losses, or economic failure. But such efforts inevitably undermine the loss aspect of "profit and loss." Profit and loss go together — like up and down, left and right, good and bad. If we try to do away with losses, we'll wind up diluting the meaning of profits. After all, why strive for profits if Uncle Sam will cover your losses with a bailout? Why bust your butt to compete and succeed if you can just clamor for a handout instead? Bailouts destroy the profit motive — and all the benefits of a competitive economy.

By removing the risk of failure, government inevitably creates an environment where crony-capitalism flourishes. And we end up with the same essential distortions in our economy that has lead to the financial crisis.

Best comment on the Stimulus Package

From a commenter on SF gate.com:

"Yay, now we don't have to hear anymore complaining. Everyone is going to get theirs. I am going to get $500.00, wow, and my grandaughter gets to pay for it all. I'm not worried, she'll get a really good job holding a flag for the road workers. Oh thank you Messiah, you're just too good for us little people."

Socialized Medical Slaughter

From Copious Dissent.

Let's have a Health Care system just like Canada does!

Every Canadian gets "free" health care we are told and therefore health care in Canada is more "fair" and "just." But as uncle Milton used to say, "there's no such thing as a free lunch."

From the WSJ:

...Canadians often wait months or even years for necessary care. For some, the status quo has become so dire that they have turned to the courts for recourse. Several cases currently before provincial courts provide studies in what Americans could expect from government-run health insurance.

In Ontario, Lindsay McCreith was suffering from headaches and seizures yet faced a four and a half month wait for an MRI scan in January of 2006. Deciding that the wait was untenable, Mr. McCreith did what a lot of Canadians do: He went south, and paid for an MRI scan across the border in Buffalo. The MRI revealed a malignant brain tumor.

Ontario's government system still refused to provide timely treatment, offering instead a months-long wait for surgery. In the end, Mr. McCreith returned to Buffalo and paid for surgery that may have saved his life. He's challenging Ontario's government-run monopoly health-insurance system, claiming it violates the right to life and security of the person guaranteed by the Canadian Charter of Rights and Freedoms.

Shona Holmes, another Ontario court challenger, endured a similarly harrowing struggle. In March of 2005, Ms. Holmes began losing her vision and experienced headaches, anxiety attacks, extreme fatigue and weight gain. Despite an MRI scan showing a brain tumor, Ms. Holmes was told she would have to wait months to see a specialist. In June, her vision deteriorating rapidly, Ms. Holmes went to the Mayo Clinic in Arizona, where she found that immediate surgery was required to prevent permanent vision loss and potentially death. Again, the government system in Ontario required more appointments and more tests along with more wait times. Ms. Holmes returned to the Mayo Clinic and paid for her surgery.

Read the full Wall Street Journal piece.

General Motors to Invest $1 Billion in Brazil Operations

My dear fellow taxpayer, here is another example of how our tax dollars (via corporate welfare) is going to be burned up by a large corporation. When it’s not your money it is soooo easy to spend:

General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

Hundreds of Economists Sign on to Cato Institute Ad

The Stimulus Monster

See the full chart at The Washington Post.

The Stimulus package and viagra have a lot in common

HT: Cafe Hayek

Mr. President, there is no Santa Claus

Walter E. Williams on the stimulus package:

Suppose the value of all that we will produce in 2009, our gross domestic product (GDP), totals $14 trillion. There cannot be any disagreement that if Congress spends $4 trillion, of necessity there is only $10 trillion left over for us to spend privately. In other words, if Congress is going to spend $4 trillion, it must find a way to get us to spend $4 trillion less. The most open and aboveboard method to force us to spend less privately is to tax us to the tune of $4 trillion.

You might say, "Congress doesn't have to tax us $4 trillion. They could tax us $3 trillion and run a $1 trillion budget deficit." You have that wrong. There is no way for Congress to spend $4 trillion out of our 2009 $14 trillion GDP by getting us to spend only $3 trillion less privately. It has to be $4 trillion less. Another method to force us to spend less privately is to print money and inflate the currency. Rising prices reduce our ability to spend privately since each dollar we hold will not buy as much. Another way is for Congress to borrow, thereby reducing our ability to spend privately. By the way, all of this means that in any real economic sense the federal budget is always balanced. That is, if Congress spends $4 trillion we must privately spend $4 trillion less whether it is accomplished through taxation, inflation or borrowing.

The stimulus package, otherwise known as the soaking of the American taxpayer part two, is essentially a massive transfer of wealth that will not do enough to create jobs in the private sector. Oh, I will admit that it will create some jobs, mostly in the public sector. But the private sector of the economy will see little to no real benefit. Senate Republicans need to vote against this wasteful package; they need to resist the President's attempt to guile them into backing a bill that will eventually fail. Let the Democrats own it. And when it flies like a lead zeppelin, they won't be able to hide behind the excuse that Republicans thought that it would work too.

Stimulus Boarding

The taxpayer getting soaked.

The Obama-meter

Tracking Obama's campaign promises. I love the internet.

Tom Daschle Ad

I couldn't help myself. Here is an old Daschle political ad where we see the tax scofflaw driving himself around in an old beater.

Obama's appointments don't worry about raising taxes, they just don't pay them!

Obama's vetting process is obviously faulty: Daschle falls on his sword and withdraws as Obama's Health and Human Services secretary. And Nancy Killefer withdraws from consideration to be the federal government's chief performance officer--a new position created by the Obama administration. Well, ladies and gentlemen, here is change we can believe in!

HT: Carpe Diem for cartoon.

How to piss off our friends

Europeans are not very happy about the "Buy American" clause in the current stimulus bill:

The EU and Canadian ambassadors to Washington have already warned that the clause could promote protectionism and trigger retaliatory moves.

UPDATE: The Chef over at The Economist's Cookbook deftly expands on this post. Please take some time to take a look.

Memo to Democrats

The massive stimulus package put forth by Democrats may knock off a few percentage points off of unemployment numbers but it most likely will not lead the economy out of recession:

President Obama’s mammoth stimulus plan may be the largest single bill Congress has ever considered. But that doesn’t mean it will solve all the economic problems facing the US.

The nation is mired in one of its worst recessions, and is likely to shed so many jobs and so much business production that even an unprecedented jolt of government spending wouldn’t by itself be able to replace the losses.

In a best-case scenario, by the end of 2010 the recovery package would plug about half the gap between actual Gross Domestic Product and what the GDP would be if the economy were healthy, according to the Congressional Budget Office. The corresponding unemployment rate might be 6.8 percent, in CBO’s judgement – two percentage points lower than it otherwise would have been.

“So even with a [stimulus] package of that size, there’s still a substantial shortfall in economic activity relative to what we could be doing,” said CBO director Douglas Elmendorf in Jan. 27 testimony before Congress.

Senate Republicans need to land on this with both feet and insist on less liberal Christmas tree ornaments and more tax cuts that encourage business investment. Ask yourselves this question: At what point does an increasing national deficit adversely effect the value of the dollar and our ability to sell treasury bills (to foreign governments) to cover our massive debt?

"Buy American" is a bad idea

Douglas A. Irwin at the New York Times reminds us that lest we resolve to repeat mistakes from the past, the current provision in the stimulus bill that requires "preference be given to domestic steel producers in building contracts and other spending," smacks of protectionism just when it is least desired:

...History has shown that Buy American provisions can raise the cost and diminish the effect of a spending package. In rebuilding the San Francisco-Oakland Bay Bridge in the 1990s, the California transit authority complied with state rules mandating the use of domestic steel unless it was at least 25 percent more expensive than imported steel. A domestic bid came in at 23 percent above the foreign bid, and so the more expensive American steel had to be used. Because of the large amount of steel used in the project, California taxpayers had to pay a whopping $400 million more for the bridge. While this is a windfall for a lucky steel company, steel production is capital intensive, and the rule makes less money available for other construction projects that can employ many more workers.

American manufacturers have ample capacity to fill the new orders that will come as a result of the fiscal stimulus. In addition, other countries are watching closely to see if the crisis becomes a general excuse for the United States to block imports and favor domestic firms. General Electric and Caterpillar have opposed the Buy American provision because they fear it will hurt their ability to win contracts abroad.

HT: Don Boudreaux at Cafe Hayek