Saturday, February 28, 2009
Friday, February 27, 2009
Obama's Biggest Bailout Beneficiaries: Lobbyists
by Christopher Manion
A fascinating and ominous article (vie Drudge) features Fidelity's Edward Johnson, a critic of FDR and of Obama's "New Deal II."
"Johnson, sounding like he’s never been a big fan of the original New Dealers from the 1930s, warned of too much government involvement in the economy and indicated Fidelity is beefing up its government-affairs unit to fend off possibly burdensome new regulations."
Isn't it curious that the best these all-powerful financial titans can do to defend themselves is hire lobbyists? Yet that's exactly what is happening all over the private-sector, as it faces mass nationalization.
But wait, there's more: next, Johnson has the temerity to blame the government! (no names mentioned, he's not insane, and he has to be careful: apparently he lives in Massachusetts):
"[T]his climate was caused by many well-intentioned policies - stimulated by individuals at high levels in government and sanctioned by regulatory structures."
Two dark clouds appear (and no silver lining): first, Mr. Johnson had better be careful, economist Dan Mitchell tells the reporter, because it's "risky" for Mr. Johnson to criticize government. It might "anger government policymakers."
And second, deferential ignorance by "professionals" still runs rampant: "But William Cheney, chief economist at Boston’s John Hancock Financial, said he 'very much' disagreed with Johnson’s version of FDR’s New Deal policies. Roosevelt’s initial policies did boost the economy, which faltered after FDR tried to rein in government spending, Cheney said
A fascinating and ominous article (vie Drudge) features Fidelity's Edward Johnson, a critic of FDR and of Obama's "New Deal II."
"Johnson, sounding like he’s never been a big fan of the original New Dealers from the 1930s, warned of too much government involvement in the economy and indicated Fidelity is beefing up its government-affairs unit to fend off possibly burdensome new regulations."
Isn't it curious that the best these all-powerful financial titans can do to defend themselves is hire lobbyists? Yet that's exactly what is happening all over the private-sector, as it faces mass nationalization.
But wait, there's more: next, Johnson has the temerity to blame the government! (no names mentioned, he's not insane, and he has to be careful: apparently he lives in Massachusetts):
"[T]his climate was caused by many well-intentioned policies - stimulated by individuals at high levels in government and sanctioned by regulatory structures."
Two dark clouds appear (and no silver lining): first, Mr. Johnson had better be careful, economist Dan Mitchell tells the reporter, because it's "risky" for Mr. Johnson to criticize government. It might "anger government policymakers."
And second, deferential ignorance by "professionals" still runs rampant: "But William Cheney, chief economist at Boston’s John Hancock Financial, said he 'very much' disagreed with Johnson’s version of FDR’s New Deal policies. Roosevelt’s initial policies did boost the economy, which faltered after FDR tried to rein in government spending, Cheney said
Thursday, February 26, 2009
Obama Arrogance
Dear Editor:
President Obama proclaimed that "The American people are watching. They need this [stimulus] plan to work. They expect to see the money they've earned, they've worked so hard to earn, spent in its intended purposes" ("Jindal rejects La.'s stimulus share," Feb. 22).
If Mr. Obama were truly concerned about having money spent in its intended purposes, he'd let people keep much more of what they earn. Each of us earns income by working, saving, and taking risks - efforts that we exert to improve our standard of living as each of us judges best. Few people earn income intending for a third party to confiscate large chunks of it. And only unalloyed arrogance can lead such a third party to imagine that he or she, better than each of the income earners, knows best how to spend the confiscated funds.
Sincerely,
Donald J. Boudreaux
President Obama proclaimed that "The American people are watching. They need this [stimulus] plan to work. They expect to see the money they've earned, they've worked so hard to earn, spent in its intended purposes" ("Jindal rejects La.'s stimulus share," Feb. 22).
If Mr. Obama were truly concerned about having money spent in its intended purposes, he'd let people keep much more of what they earn. Each of us earns income by working, saving, and taking risks - efforts that we exert to improve our standard of living as each of us judges best. Few people earn income intending for a third party to confiscate large chunks of it. And only unalloyed arrogance can lead such a third party to imagine that he or she, better than each of the income earners, knows best how to spend the confiscated funds.
Sincerely,
Donald J. Boudreaux
Wednesday, February 25, 2009
Real Estate Reality
From CNBC: investors just bought from the banks a number of lots, uncompleted houses, and competed houses in Vero Beach, Florida, for 17 cents on the dollar.
Tuesday, February 24, 2009
Politicizing Mortgage Lending - It's Not New
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260
Sunday, February 22, 2009
"We Are Going to Seize Cash, Bank Accounts, Jewelry, Artwork, Houses, Cars, Boats. . ."
By Thomas DiLorenzo
Those aren't the words from a script for "The Sopranos," but the blabbering of a socialist-minded government lawyer in heat, the Maryland U.S. Attorney Rod Rosenstein.
After "subprime" borrowers began defaulting on home loans in Baltimore City, the city government panicked over the loss of property tax revenue. So they're suing Wells Fargo Bank for allegedly preying upon the presumably ignorant, helpless, and unable-to-read-mortgage-applications population of the city. Although this is nothing but a wild and unsubstantiated accusation by a city government whose mayor was just indicted for felony theft, perjury, fraud, and misconduct in office, the U.S. Attorney is chomping at the bit to loot and plunder Wells Fargo employees, many of whom were strongarmed by the same U.S. government into making all those bad loans in the first place.
Also,
Let's put the latest installment of Obammunism in perspective:
1. For several decades HUD, the Fed, The Comptroller of the Currency, the Office of Thrift Supervision, the equal housing laws, Congress, and every tentacle of government involved in housing forced, bribed, and coerced mortgage lenders to make trillions of dollars in bad loans to unqualified or "subprime" borrowers, promising them that the risk would be wiped away by Fannie and Freddie when they purchased and "securitized" the bad loans. The Community Reinvestment Act was just one part of this scheme.
2. This was all part and parcel of an underhanded or underground attempt to implement one plank of FDR's plan for socialism in America known as his "Economic Bill of Rights" ("Every family has a right to a decent home" -- at someone else's expense).
3. Now that thousands of these bad loans have defaulted, the advocates of Obammunism have not given up: The latest scheme is to tax the 93% of Americans who make their mortgage payments to keep these deadbeats in homes they still cannot afford. Renting is not an option, for some reason. It's the "right" of these parasites to live at the expense of the more productive members of society, after all. The sainted FDR said so.
Those aren't the words from a script for "The Sopranos," but the blabbering of a socialist-minded government lawyer in heat, the Maryland U.S. Attorney Rod Rosenstein.
After "subprime" borrowers began defaulting on home loans in Baltimore City, the city government panicked over the loss of property tax revenue. So they're suing Wells Fargo Bank for allegedly preying upon the presumably ignorant, helpless, and unable-to-read-mortgage-applications population of the city. Although this is nothing but a wild and unsubstantiated accusation by a city government whose mayor was just indicted for felony theft, perjury, fraud, and misconduct in office, the U.S. Attorney is chomping at the bit to loot and plunder Wells Fargo employees, many of whom were strongarmed by the same U.S. government into making all those bad loans in the first place.
Also,
Let's put the latest installment of Obammunism in perspective:
1. For several decades HUD, the Fed, The Comptroller of the Currency, the Office of Thrift Supervision, the equal housing laws, Congress, and every tentacle of government involved in housing forced, bribed, and coerced mortgage lenders to make trillions of dollars in bad loans to unqualified or "subprime" borrowers, promising them that the risk would be wiped away by Fannie and Freddie when they purchased and "securitized" the bad loans. The Community Reinvestment Act was just one part of this scheme.
2. This was all part and parcel of an underhanded or underground attempt to implement one plank of FDR's plan for socialism in America known as his "Economic Bill of Rights" ("Every family has a right to a decent home" -- at someone else's expense).
3. Now that thousands of these bad loans have defaulted, the advocates of Obammunism have not given up: The latest scheme is to tax the 93% of Americans who make their mortgage payments to keep these deadbeats in homes they still cannot afford. Renting is not an option, for some reason. It's the "right" of these parasites to live at the expense of the more productive members of society, after all. The sainted FDR said so.
Friday, February 20, 2009
Thursday, February 19, 2009
Quote Of The Day
H.L. Mencken sagely observed,
"[I]f experience teaches us anything at all it teaches us this: that a good politician, under democracy, is quite as unthinkable as an honest burglar. His very existence, indeed, is a standing subversion of the public good in every rational sense. He is not one who serves the common weal; he is simply one who preys upon the commonwealth"
Adds Thomas DiLorenzo:
"Not all plunderers live in the D.C. area, of course. Economists Richard Vedder and Lowell Galloway once documented that there is a substantial (20–40 percent) "income premium" in every state capitol compared to the average income in the rest of the state.
As Americans celebrated their democracy during the recent elections, which will not change how their government is run in any significant way, they proved once again that we have become a nation of chumps and suckers."
"[I]f experience teaches us anything at all it teaches us this: that a good politician, under democracy, is quite as unthinkable as an honest burglar. His very existence, indeed, is a standing subversion of the public good in every rational sense. He is not one who serves the common weal; he is simply one who preys upon the commonwealth"
Adds Thomas DiLorenzo:
"Not all plunderers live in the D.C. area, of course. Economists Richard Vedder and Lowell Galloway once documented that there is a substantial (20–40 percent) "income premium" in every state capitol compared to the average income in the rest of the state.
As Americans celebrated their democracy during the recent elections, which will not change how their government is run in any significant way, they proved once again that we have become a nation of chumps and suckers."
Wednesday, February 18, 2009
Republican Socialists
http://www.ft.com/cms/s/0/e310cbf6-fd4e-11dd-a103-000077b07658.html?nclick_check=1
Tuesday, February 17, 2009
U.S. Economic Fascism - It's Undeniable
From USA Today
Does auto task force trump a car czar?
From a "car czar" who could have micromanaged the foundering auto industry, for better or worse, Detroit automakers now will be delivered into the hands of a committee, the White House says.
The Presidential Task Force on Autos — its members not yet named — will consist of representatives of nine governmental agencies and the White House, and will be run by Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers.
Does auto task force trump a car czar?
From a "car czar" who could have micromanaged the foundering auto industry, for better or worse, Detroit automakers now will be delivered into the hands of a committee, the White House says.
The Presidential Task Force on Autos — its members not yet named — will consist of representatives of nine governmental agencies and the White House, and will be run by Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers.
Monday, February 16, 2009
Corruption At Every Turn
By Russell Roberts
On the same day the Washington Post reports the passing of a $790 billion spending package that includes about $50 billion for so-called infrastructure, it also reports on a Department of Transportation audit of spending on roads:
Design and engineering companies helping to build the nation's highways ran up millions of dollars in inappropriate charges at the expense of taxpayers, including bills for parties, luxury car leases and hefty paychecks for executives, according to auditors.
Among the "unallowable expenses" singled out:
$355,767 to pay the personal income taxes of executives.
$301,667 to lease 45 automobiles,including Mercedes, BMW and other luxury brands.
$247,685 for dinners, tickets to sporting events, theme-holiday parties.
$60,000 paid to a consultant with only a verbal agreement.
$35,352 charged by two firms for "image-enhancing items such as golf shirts."
The Transportation Department audit, which took four years, examined bills from a sampling of 41 design and engineering firms picked from 3,580 firms that had active contracts with state departments of transportation. Auditors looked at data from 2003because it was the most current year available when the review began.
On the same day the Washington Post reports the passing of a $790 billion spending package that includes about $50 billion for so-called infrastructure, it also reports on a Department of Transportation audit of spending on roads:
Design and engineering companies helping to build the nation's highways ran up millions of dollars in inappropriate charges at the expense of taxpayers, including bills for parties, luxury car leases and hefty paychecks for executives, according to auditors.
Among the "unallowable expenses" singled out:
$355,767 to pay the personal income taxes of executives.
$301,667 to lease 45 automobiles,including Mercedes, BMW and other luxury brands.
$247,685 for dinners, tickets to sporting events, theme-holiday parties.
$60,000 paid to a consultant with only a verbal agreement.
$35,352 charged by two firms for "image-enhancing items such as golf shirts."
The Transportation Department audit, which took four years, examined bills from a sampling of 41 design and engineering firms picked from 3,580 firms that had active contracts with state departments of transportation. Auditors looked at data from 2003because it was the most current year available when the review began.
Saturday, February 14, 2009
Wednesday, February 11, 2009
The Job Creation Myth
By Russell Roberts
The idea isn't just to employ people. The idea is to employ more people than we're employing now. That's the claim of stimulus. It's not enough to spend money. It's not enough to hire people. The claim of President Obama and Brad DeLong and others is that by spending money, other things that wouldn't otherwise have happened, will happen.
Yes, constructing a pool requires workers. But if workers who know how to build a swimming pool are already fully employed or close to it, then building a community wave pool is just going to drive up the wages of construction workers. Those higher wages discourage people from building a pool in their back yard or paving their driveway. If that's the case, then NO JOBS GET CREATED. Jobs get moved around from the private sector to the public sector. But there's no net job creation. The word "net" in the previous phrase is really redundant. Job creation really is about net jobs not gross jobs.
Of course there isn't full employment in the construction business. I assume some people who know how to build houses can also build swimming pools. And a lot of people are holding off on that backyard pool or the new driveway. So maybe a lot of the people who are good at building pools are unemployed. In that case, jobs will be created by the public spending. But you would never want to count the number of workers working to build the pool as a measure of the number of jobs created. And it isn't ridiculous to wonder if jobs will be created by building more community swimming pools. It's a good question, not a stupid one. The answer depends on the unemployment rate among the people with the skills to do the job. The answer depends on the location of the public project and the local unemployment rate of the people with the necessary skills. The answer depends on the ability of people who aren't but who have the relevant skills to find out about the new opportunity.
The answer also depnds on whether the mayor puts the project out to bid to the lowest bidder or uses his friend's firm.
Once all those community wave pools get built, maybe the people who built them will want a nicer house and they'll hire even more of those unemployed construction workers. That's another way that the spending might create jobs. (This is the so-called multiplier effect which presumes that taxpayers don't reduce spending in anticipation of higher taxes in the future.) But ignoring that possibility isn't the mistake that John King is supposedly making. He's supposedly missing the obvious undeniable so-called fact that spending and stimulus are the same thing by definition. But they're not.
The idea isn't just to employ people. The idea is to employ more people than we're employing now. That's the claim of stimulus. It's not enough to spend money. It's not enough to hire people. The claim of President Obama and Brad DeLong and others is that by spending money, other things that wouldn't otherwise have happened, will happen.
Yes, constructing a pool requires workers. But if workers who know how to build a swimming pool are already fully employed or close to it, then building a community wave pool is just going to drive up the wages of construction workers. Those higher wages discourage people from building a pool in their back yard or paving their driveway. If that's the case, then NO JOBS GET CREATED. Jobs get moved around from the private sector to the public sector. But there's no net job creation. The word "net" in the previous phrase is really redundant. Job creation really is about net jobs not gross jobs.
Of course there isn't full employment in the construction business. I assume some people who know how to build houses can also build swimming pools. And a lot of people are holding off on that backyard pool or the new driveway. So maybe a lot of the people who are good at building pools are unemployed. In that case, jobs will be created by the public spending. But you would never want to count the number of workers working to build the pool as a measure of the number of jobs created. And it isn't ridiculous to wonder if jobs will be created by building more community swimming pools. It's a good question, not a stupid one. The answer depends on the unemployment rate among the people with the skills to do the job. The answer depends on the location of the public project and the local unemployment rate of the people with the necessary skills. The answer depends on the ability of people who aren't but who have the relevant skills to find out about the new opportunity.
The answer also depnds on whether the mayor puts the project out to bid to the lowest bidder or uses his friend's firm.
Once all those community wave pools get built, maybe the people who built them will want a nicer house and they'll hire even more of those unemployed construction workers. That's another way that the spending might create jobs. (This is the so-called multiplier effect which presumes that taxpayers don't reduce spending in anticipation of higher taxes in the future.) But ignoring that possibility isn't the mistake that John King is supposedly making. He's supposedly missing the obvious undeniable so-called fact that spending and stimulus are the same thing by definition. But they're not.
Friday, February 6, 2009
If You Still Have A Job, Be Thankful
By Russell Roberts
The January job numbers were released today and weren't very encouraging.I have cleaned up the first part of the AP story in case you'd like to read it without the opinions and overwrought verbs of the reporter. Words in bold are mine:
Recession-battered employers eliminated 598,000 jobs in January, the most since the end of 1974, and catapulted increasing the unemployment rate to 7.6 percent. The grim figures were further proof that the nation's job climate is deteriorating at an alarming clip with no end in sight.
The Labor Department's report, released Friday, showed the terrible toll the drawn-out recession is having on workers and companies. It also puts even more pressure on Congress and President Barack Obama's administration to try to revive the economy through a stimulus package and a revamped financial bailout plan, both of which are may be nearing completion.
The latest net total of job losses was far worse than the 524,000 that economists expected. Job reductions in November and December also were deeper than previously reported.
With cost-cutting employers in no mood to hire, the unemployment rate bolted increased to 7.6 percent in January, the highest since September 1992. The increase in the jobless rate from 7.2 percent in December also was worse than the 7.5 percent rate economists expected though the tenth of a percentage point difference could be treated as negligible.
All told, the economy has lost a staggering 3.6 million jobs since the recession began in December 2007. About half of this decline occurred in the past three months.
"Companies are in survival mode and are really cutting to the bone," said economist Ken Mayland, president of ClearView Economics. "They are cutting and cutting hard now out of fear of an uncertain future."
Factories slashed cut 207,000 jobs in January, the largest one-month drop since October 1982, partly reflecting heavy losses at plants making autos and related parts. Construction companies got rid of 111,000 jobs. Professional and business services chopped 121,000 positions. Retailers eliminated 45,000 jobs. Leisure and hospitality axed 28,000 slots.
Those reductions swamped employment gains in education and health services, as well as in the government but I won't bother telling you the size of these increases.
To repeat what was said a few paragraphs earlier in a trivially different way: Just in the 12 months ending January, an astonishing 3.5 million jobs have vanished, the most on record going back to 1939, although the total number of jobs has grown significantly since then which is just a confusing way of saying that as a percentage of the work force, it's nothing close to 1939
The January job numbers were released today and weren't very encouraging.I have cleaned up the first part of the AP story in case you'd like to read it without the opinions and overwrought verbs of the reporter. Words in bold are mine:
Recession-battered employers eliminated 598,000 jobs in January, the most since the end of 1974, and catapulted increasing the unemployment rate to 7.6 percent. The grim figures were further proof that the nation's job climate is deteriorating at an alarming clip with no end in sight.
The Labor Department's report, released Friday, showed the terrible toll the drawn-out recession is having on workers and companies. It also puts even more pressure on Congress and President Barack Obama's administration to try to revive the economy through a stimulus package and a revamped financial bailout plan, both of which are may be nearing completion.
The latest net total of job losses was far worse than the 524,000 that economists expected. Job reductions in November and December also were deeper than previously reported.
With cost-cutting employers in no mood to hire, the unemployment rate bolted increased to 7.6 percent in January, the highest since September 1992. The increase in the jobless rate from 7.2 percent in December also was worse than the 7.5 percent rate economists expected though the tenth of a percentage point difference could be treated as negligible.
All told, the economy has lost a staggering 3.6 million jobs since the recession began in December 2007. About half of this decline occurred in the past three months.
"Companies are in survival mode and are really cutting to the bone," said economist Ken Mayland, president of ClearView Economics. "They are cutting and cutting hard now out of fear of an uncertain future."
Factories slashed cut 207,000 jobs in January, the largest one-month drop since October 1982, partly reflecting heavy losses at plants making autos and related parts. Construction companies got rid of 111,000 jobs. Professional and business services chopped 121,000 positions. Retailers eliminated 45,000 jobs. Leisure and hospitality axed 28,000 slots.
Those reductions swamped employment gains in education and health services, as well as in the government but I won't bother telling you the size of these increases.
To repeat what was said a few paragraphs earlier in a trivially different way: Just in the 12 months ending January, an astonishing 3.5 million jobs have vanished, the most on record going back to 1939, although the total number of jobs has grown significantly since then which is just a confusing way of saying that as a percentage of the work force, it's nothing close to 1939
Thursday, February 5, 2009
Remember The Baloney About A Profit For The Taxpayers From The Bailout?
http://www.bloomberg.com/apps/news?pid=20601109&sid=a2dHh.RbAogk&refer=home
Wednesday, February 4, 2009
Sunday, February 1, 2009
What A Surprise!
Even though thousands are being laid-off/terminated from jobs that actually produce something, the federal government payroll is increasing. Face it, the U.S. is well down the road to western European statism.
http://apnews.myway.com/article/20090131/D9627HU00.html
http://apnews.myway.com/article/20090131/D9627HU00.html
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