Saturday, January 31, 2009
Tax Cheats R Us
Friday, January 30, 2009
Atlas Continues to Shrug
State Farm is the second largest insurer to Florida homeowners; its policyholders may now need to get insurance from a state insurance fund. The already-strapped state government will now contend with the ever-increasing liabilities it is accruing in its insurance fund.
If a company can't make money, eventually it will flee the market. There is no clearer measure of the failure of government intervention when businesses cease operating due to restrictions and limitations imposed on their activities.
Thursday, January 29, 2009
The UN: Jokers' Wild
The U.S Navy recently intercepted and searched a suspicious Iranian-chartered ship. The search revealed it contained weapons, purportedly bound for Syria but suspected by the Navy to be bound for Hamas.
In either case, UN resolutions prohibit Iran from exporting weapons and allow nations to inspect ships suspected of smuggling them - but do not allow the ships to be seized.
So our Navy let the ship go.
This is the type of "pressure" on Iran we have secured from the UN. It is a joke: if the Navy can't seize the ship, Iran won't stop attempting to arm the terrorists Even worse, it deludes us into thinking UN actions are effective in pressuring Iran when they are not.
This is Stimulus?
Since the plan doesn't include elements that change economic behavior for the better, such as cuts in marginal tax rates, the purported benefits are directly related to what is actually spent.
So stimulus isn't really the issue.
Rahm Emanuel, Barack Obama's chief of staff, said shortly after the election, "Never let a serious crisis go to waste."
I wrote about this at the time, and now events confirm what he meant: pass a bill that gives subsidies to the Democrats' favored groups and pet causes.
But There's No Media Bias
But that one paragraph compares to the article's 22 paragraphs on Israel's alleged transgression.
Israel is a western democracy and Hamas is a blood-thirsty terrorist group who killed Palestinian "collaborators" during the fighting. Naturally, for the left, Israel's actions in defense of its citizens are terrible, while Hamas' actions to brutalize Israel and Palestinians are glossed over and minimized.
Wednesday, January 28, 2009
The Line of Pigs at the Trough is as Far as the Eye Can See
Tuesday, January 27, 2009
Special Envoy-Itis
Special envoys create the impression that America "really cares" about a foreign policy matter and that we are doing everything we can to resolve a problem. As I discussed in a recent column, this may be good politics and media relations but may not be helpful.
After all, isn't this the job of our new Secretary of State, Hillary Clinton?
Presidential Doublespeak
"Our goal is not to further burden an already-struggling industry. It is to help America's auto makers prepare for the future."
While his goal no doubt isn't to add to the industry's burdens, in fact such regulations will. Good intentions are not the measure of a policy, but reality. And the auto makers, on the verge of collapse, don't need to add to their R&D budgets to develop new technologies to meet this regulatory burden nor have their most profitable vehicles (trucks and SUVs) regulated out of existence.
Monday, January 26, 2009
These Piggies Get to Feed at the Trough for Free
But the $825 billion "stimulus" bill has state and local governments seeking $200 billion in federal aid. Neither Congress nor the Obama administration has discussed insisting that the states have limitations imposed on them, such as spending constraints. Instead, such aid will reward those states which increased spending in the good times only to find themselves pinched today.
For example, New York state could take its $12 billion deficit and have a $5 billion surplus if it spent per person the same as the average for the rest of the states.
Here We Go Again
Politicians and journalists have been raising a stink about the lack of lending by bank, complaining that TARP recipients should using the bailout funds to lend to "stimulate" the economy.
While I have written about this before, it is such an important issue it is worth repeating again and again. Banks need to make good, profitable loans. They have every incentive to do so. If they don't make a loan, it is because they don't believe it is a good risk. To force the banks to make loans they wouldn't otherwise is to say you are forcing banks to make risky, unprofitable loans.
And that's how we got into our current recession.
If you ask, why do the banks need or deserve TARP funds, the issue is not about bailing out shareholders (who have suffered staggering losses); nor is it about paying executive bonuses (many have foregone or greatly reduced them, which are already hurting organizations such as AIG and BoA as talent flees government-regulated entities); and nor is it about making acquisitions (although that is one way to ameliorate the credit crisis, as evidenced by government pressure to get M&A deals done such BoA's purchase of Merrill Lynch and JP Morgan's purchase of Bear Stearns).
Instead, the bailout is designed to protect creditors, which means all of us who have money in bank accounts - and more broadly, is designed to prevent money from fleeing banks and investing in Treasury bills/bonds or taking cash and literally putting it a mattress (which happened in the Great Depression).
And that is a financial collapse that could turn this recession into a depression.
Auto Crisis Deepens
The auto bailout will simply grow and grow unless the Obama administration takes a hard line.
Don't hold your breath.
Sunday, January 25, 2009
Obama Giveth and He Taketh Away
Transparency Indeed
As one of my previous columns makes clear, this is a completely incorrect reading of the economics of the situation. But the Wall Street Journal highlights what is the genuine problem with a lack of transparency in the financial bailout: Congressmen and other politicians are pressuring regulators to direct bailout money to certain banks.
How about that. What a shock that where there is a pot of money, Congress will get their hands in the middle of it. This type of political pressure will only raise the cost of the bailout, as banks that otherwise wouldn't get funds do so.
Sounds like extensive hearings and media pressure should be brought to bear on these shenanigans. But since Barney Frank is one of those who have applied pressure to help a favored bank, don't count on hearings any time soon.
Saturday, January 24, 2009
A New Surgeon Generals' Warning: The Left is Dangerous to Your Health
Friday, January 23, 2009
Another Win for the Gipper
Stupid is as Stupid Does
The media reports favorably, and many in the public feel reassured, with such efforts - even when what is done is often unhelpful or even harmful. Or stupid.
The Wall Street Journal highlights this attitude perfectly in discussing Obama's approach to Israel:
"On the foreign-relations front, Mr. Obama made good on his campaign pledge to engage on the Arab-Israeli dispute from 'day one,' breaking from his predecessor, who waited until late in his second term before jumping fully into the conflict."This is the received wisdom of the liberal media, that Bush had no policy toward the Palestinian-Israeli conflict for many years. But it simply isn't true. Bush's policy was to marginalize Yasser Arafat, the terrorist leader of the Palestinians.
It was a purposeful and thoughtful policy, designed to force a change in Palestinian leadership and/or policy - recognizing that there can be no viable long-term settlement between Israel and the Palestinians if the Palestinians are ruled by terrorists who seek Israel's destruction. It was a policy that comported with our ideals and interests.
But it was not a policy of summits, multiple meetings, photo ops, and the like - which was the failed policy of Bill Clinton.
Instead, Bush's policy worked. Arafat's party, Fatah, has greatly moderated its posture under new leadership. While that isn't a complete solution, the conflict is not amenable to simple or short- term remedies. It will take years for the Palestinians to have their desire to destroy Israel thwarted before they give up that goal and settle for peaceful coexistence.
Thursday, January 22, 2009
Is Atlas Shrugging?
Many in the country, including some conservatives, have advocated reducing or eliminating bonuses at financial firms who have received government assistance. These departures are the logical consequence of imposing government mandated or threatened restrictions on financial firms.
As I have discussed in an earlier column, if you pay people below market wages, they will leave their employer - even in this environment. And the companies will be weaker, hurting all of us as taxpayers who have invested in these firms through TARP and as citizens who need a successful financial sector for the economy to thrive.
Ayn Rand's novel, Atlas Shrugged, depicted a world where the successful went on strike to protest the confiscations and impositions they faced by government policy.
It looks like Atlas is beginning to shrug.
Wednesday, January 21, 2009
President Barack Obama
- His economic policies will be moderate, focused on Keynesian-style stimulus and less likely to raise taxes than he campaigned on. He will have to fight Comrade Nancy Pelosi on this, who recently reiterated her desire to increase taxes. He will disappoint his union supporters and not seek to revoke free-trade agreements - he may even shock us by seeking their expansion, if his rhetoric about engaging the world is a real.
- His defense and foreign policy will look more like George Bush's than his supporters would ever have guessed. I even think he will take military action to prevent Iran from developing nuclear weapons - because it would be a political disaster for him and the Democrats otherwise. He will claim he is withdrawing American forces from Iraq, but in reality it will be very similar to what would have occurred under Bush or McCain.
- He will satisfy his leftist base with judicial appointments, since the base will appreciate their importance but the public at large will be less concerned about this relative to economic or foreign policy matters.
- A big wild card will be whether he really will pursue a radical revamp of energy usage. He campaigned heavily on this, but his advisers will surely tell him of the profound economic costs of doing so which, given the recession, will likely moderate their extent. I suspect he will spend lots of money to support R&D and provide incentives for green energy, but not legislate draconian mandates.
Monday, January 19, 2009
Promises Made, Promises Broken*
Sunday, January 18, 2009
The Line of Pigs at the Trough is Over the Hill and Through the Woods
Saturday, January 17, 2009
Department of Injustice?
Friday, January 16, 2009
A New Mortgage Tax
Thursday, January 15, 2009
Promises Made, Promises Broken
Wednesday, January 14, 2009
Guantanamo Reality
Friday, January 9, 2009
A Two State Solution?
- The PLO was founded in 1964, before Israel acquired the West Bank and Gaza in 1967, for the purpose of establishing a Palestinian Arab state in Israel
- The PLO before, and Hamas today, have repeatedly called for the destruction of Israel. Words matter, and all their actions suggest that they mean what they say.
- The Palestinian leadership has preferred to let large numbers of Palestinians suffer in "temporary" refugee camps for 60 years after the 1948 Arab-Israeli war, rather than let them resettle permanently. Why? Because this allows them to demand the "right of return", whereby the "refugees" can return to Israel. It is a stunningly brutal policy (aided and abetted by the UN and West who help keep the refugee camps running), reflecting the character of the Palestinian leadership - if they can do that to their own people, why shouldn't we take them at their word and believe they wish to destroy Israel?
Tuesday, January 6, 2009
Ballooning Auto Bailout
Sunday, January 4, 2009
Guantanamo Inmates Have More Rights than Governors?
Saturday, January 3, 2009
The Worst Senate Democrat?
- Al Franken: he is currently leading by 49 votes in his battle with Norm Coleman for the Senate seat from Minnesota, and is truly a joke (no pun intended) for a candidate. It is astounding that Minnesota Democrats couldn't come up with a better candidate than Franken, but they didn't - and now he is likely to enter the Senate.
- Caroline Kennedy: in a state laden with Democrats, New York may end up with the newest member of the Kennedy clan to enter government. She has never held elected office, nor has articulated her views for public inspection until some recent efforts to do so - which included uttering "you know" 142 times in an interview.
- Robert Byrd: Byrd has been a Senator from West Virginia for 50 years, so his problems aren't new, but it is a biggie: he was a member of the KKK until at least the age of 29 or 30.
- Chris Dodd: aside from being a defender of Hugo Chavez, the would-be dictator of Venezuela, Dodd received low-interest rate mortgages from Countrywide Financial - and sat in judgment on the industry as a member, and now Chairman, of the Senate Banking committee.