Wednesday, December 31, 2008
Tuesday, December 30, 2008
Getting bigger and bigger...
A video by The Cato Institute on reasons why the federal government needs downsizing: can anyone think of a good reason why taxpayers subsidize the sugar industry?
Wednesday, December 24, 2008
Merry Christmas 2008!!!
Here's wishing all of you a very Merry Christmas! No posts until December 30th as I and the little family head out for holiday vacation.
Monday, December 22, 2008
And the rumba line just gets a little longer
Now commercial real estate developers are asking the government for financial assistance. The line for a taxpayer handout just keeps getting longer, folks. As predicted, a bad precedent was set when the Feds decided to bailout Wall Street.
Michael Crichton - Unpopular Truth
The late Michael Crichton on environmentalism as a religion, the myth of second hand smoke, and the tenuous science of global warming: You may have disagreed with him but Crichton was never a shill. He was simply an open minded and rational critic.
HT: Liberty Pen
Sunday, December 21, 2008
Words that a modern day Progressive may utter…
"We are enemies, deadly enemies, of today's capitalist economic system with its exploitation of the economically weak, its unfair wage system, its immoral way of judging the worth of human beings in terms of their wealth and their money, instead of their responsibility and their performance, and we are determined to destroy this system whatever happens!" ---Nazi ideologist Gregor Strasser
Saturday, December 20, 2008
Friday, December 19, 2008
Congress is getting a pay raise? Why?
Yes folks, just when you thought that our current economic situation couldn't get any stranger. The political class will be quietly giving themselves a sweet pay raise in 2009. Oh well, why not? After all, Congress has done a real bang-up job with just about everything under the sun and under their perceived great scope. With an approval rating lower than George W. Bush, you would think that they should get a pay cut at least until the economy and the rest of the sucker-taxpayers like you and me had something to be cheerful about. This is yet another example of how trusting our country to these people is always a bad idea.; the taxpayer seems to not be a priority.
HT: Copious Dissent
HT: Copious Dissent
Thursday, December 18, 2008
Best posts I've read today
This Bobo Files post neatly sums up my rancor on the rampant big government corporatism that has become the lever of choice for the political elite in Washington.
Shaving Leviathan sums up the craziness at the Federal Reserve.
Shaving Leviathan sums up the craziness at the Federal Reserve.
First Lady of Star Trek dies at 76
I'm a big science fiction fan and notably the entire Star Trek brand so this is sad news. God speed, Majel.
Wednesday, December 17, 2008
No bailout for automakers!!
Don J. Boudreaux on the possible bailout of the big three:
So, far from solving this problem, any "bridge loans" from Uncle Sam to the Big Three will only delay the inevitable need to restructure. Bailout money would force taxpayers to foot the bill for Detroit's irresponsible past promises while it protects these firms from having to do the hard work of correcting this real source of their unprofitability. (Of course, bailout money would also protect overpaid and over-pensioned UAW members from having their pay and pensions scaled back to reasonable levels.)
With the symptoms of this serious ailment socialized for however long the bailout funds last -- that is, with nothing done to cure the ailment -- GM, Ford and Chrysler will be no better able to operate profitably after they run through the bailout funds than they're able to do now.
So if they're bailed out now, they'll inevitably be back in Washington in the near future to beg for another bailout.
My Comment: No one would have imagined a world without Pan Am or Woolworth's. I remember those big companies from my youth. After they were gone, the airline and retail industry continued merrily without them. Why do some people believe that if the big three go under it would be the end of the world? Yes, it would hurt to absorb those unemployed auto workers into our ailing economy but a bailout may simply prolong the inevitable. There is no guarantee that if given a bailout loan, the big three would make a triumphant comeback.
So, far from solving this problem, any "bridge loans" from Uncle Sam to the Big Three will only delay the inevitable need to restructure. Bailout money would force taxpayers to foot the bill for Detroit's irresponsible past promises while it protects these firms from having to do the hard work of correcting this real source of their unprofitability. (Of course, bailout money would also protect overpaid and over-pensioned UAW members from having their pay and pensions scaled back to reasonable levels.)
With the symptoms of this serious ailment socialized for however long the bailout funds last -- that is, with nothing done to cure the ailment -- GM, Ford and Chrysler will be no better able to operate profitably after they run through the bailout funds than they're able to do now.
So if they're bailed out now, they'll inevitably be back in Washington in the near future to beg for another bailout.
My Comment: No one would have imagined a world without Pan Am or Woolworth's. I remember those big companies from my youth. After they were gone, the airline and retail industry continued merrily without them. Why do some people believe that if the big three go under it would be the end of the world? Yes, it would hurt to absorb those unemployed auto workers into our ailing economy but a bailout may simply prolong the inevitable. There is no guarantee that if given a bailout loan, the big three would make a triumphant comeback.
"I've abandoned free-market principles to save the free-market system"
A no surprise statement from George W. Bush: Mr. Bush's "compassionate conservatism" was never much of a small government ideology to begin with (no matter what Progressives will tell you); the massive bailouts and the feckless stimulus packages have sealed the Bush administration as a big government administration.
Monday, December 15, 2008
Government intervention in our economy will not work
Cato Institute's Dan Mitchell explains the fallacy of "priming the pump." Politicians just love to spend our money.
Friday, December 12, 2008
Bailouts and Bankruptcy
Walter E. Williams on the auto bailouts:
Let's not allow Congress and members of the bailout parade panic us into allowing them to do things, as was done in the 1930s, that would convert a mild economic downturn into a true calamity. Right now the Big Three auto companies, and their unions, are asking Congress for a $25 billion bailout to avoid bankruptcy. Let's think about that a bit.
What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate. What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.
Chapter 11 of the U.S. Bankruptcy Code, where the control of its business operations are subject to the oversight and jurisdiction of the court, gives companies a chance to reorganize. The court can permit complete or partial relief from the company's debts and its labor union contracts.
A large part of the problem is the Big Three's cozy relationship with the United Auto Workers union (UAW). GM has a $73 hourly wage cost including benefits and overtime. Toyota has five major assembly plants in the U.S. Its hourly wage cost plus benefits is $48. It doesn't take rocket science to figure out which company will be at a competitive disadvantage. Then there's the "jobs bank" feature of the UAW contract where workers who are laid off workers get 95 percent of their base pay and all their benefits. Right now there's a two-year limit but in the past workers could stay in the "jobs bank" forever unless they turned down two job offers within 50 miles of their factory. At one time job bank membership exceeded 7,000 "workers." GM, Ford and Chrysler face other problems that range from poor corporate management and marketing, not to mention costly government regulations.
Two vital marketplace signals are the profits that come with success and the losses that come with failure. When these two signals are not allowed to freely function, markets operate less efficiently. To be successful a business must take in enough revenue not only to cover wages, rents and interest but profits as well. In order to accomplish that feat executives must not only satisfy customers but they must do it in a manner that efficiently utilizes all of their resources. If they fail to cover costs, it means that resources are not being used efficiently and/or consumers don't value the good being produced relative to some other alternative. When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital become available to someone else who might put them to better use. When government steps in with a bailout, it enables executives to continue mismanaging resources.
How much congressional involvement do we want with the Big Three auto companies? I'd say none. Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about the automobile business than they know about the banking and financial businesses that they've turned into a mess. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers. The belief that Congress poses the major threat to our liberty and well-being is why the founders gave them limited enumerated powers. To our detriment, today's Americans have given them unlimited powers.
HT: Jimmy Cardoza
Let's not allow Congress and members of the bailout parade panic us into allowing them to do things, as was done in the 1930s, that would convert a mild economic downturn into a true calamity. Right now the Big Three auto companies, and their unions, are asking Congress for a $25 billion bailout to avoid bankruptcy. Let's think about that a bit.
What happens when a company goes bankrupt? One thing that does not happen is their productive assets go poof and disappear into thin air. In other words, if GM goes bankrupt, the assembly lines, robots, buildings and other tools don't evaporate. What bankruptcy means is the title to those assets change. People who think they can manage those assets better purchase them.
Chapter 11 of the U.S. Bankruptcy Code, where the control of its business operations are subject to the oversight and jurisdiction of the court, gives companies a chance to reorganize. The court can permit complete or partial relief from the company's debts and its labor union contracts.
A large part of the problem is the Big Three's cozy relationship with the United Auto Workers union (UAW). GM has a $73 hourly wage cost including benefits and overtime. Toyota has five major assembly plants in the U.S. Its hourly wage cost plus benefits is $48. It doesn't take rocket science to figure out which company will be at a competitive disadvantage. Then there's the "jobs bank" feature of the UAW contract where workers who are laid off workers get 95 percent of their base pay and all their benefits. Right now there's a two-year limit but in the past workers could stay in the "jobs bank" forever unless they turned down two job offers within 50 miles of their factory. At one time job bank membership exceeded 7,000 "workers." GM, Ford and Chrysler face other problems that range from poor corporate management and marketing, not to mention costly government regulations.
Two vital marketplace signals are the profits that come with success and the losses that come with failure. When these two signals are not allowed to freely function, markets operate less efficiently. To be successful a business must take in enough revenue not only to cover wages, rents and interest but profits as well. In order to accomplish that feat executives must not only satisfy customers but they must do it in a manner that efficiently utilizes all of their resources. If they fail to cover costs, it means that resources are not being used efficiently and/or consumers don't value the good being produced relative to some other alternative. When a firm routinely fails to turn a profit, there are bankruptcy pressures. The firm's resources, workers, building and capital become available to someone else who might put them to better use. When government steps in with a bailout, it enables executives to continue mismanaging resources.
How much congressional involvement do we want with the Big Three auto companies? I'd say none. Congressmen and federal bureaucrats, including those at the Federal Reserve Board, don't know anymore about the automobile business than they know about the banking and financial businesses that they've turned into a mess. Just look at the idiotic focus of congressmen when the three auto company chief executives appeared before them. They questioned whether the executives should have driven to Congress rather than flown in on corporate jets. They focused on executive pay, which is a tiny fraction of costs compared to $73 hourly compensation to 250,000 autoworkers. The belief that Congress poses the major threat to our liberty and well-being is why the founders gave them limited enumerated powers. To our detriment, today's Americans have given them unlimited powers.
HT: Jimmy Cardoza
Promises, promises you can't keep
It seems that some on the Left aren't too keen on Obama appointments and his backtracking on some campaign rhetoric.
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