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Government Grinds the Gears | Richard W. Rahn | Cato Institute: Commentary: "f you knew that baseball teams with winning records tended to be more profitable for their owners than those with losing records — and if you learned that the Baltimore Orioles had just been purchased by the major league umpire's union, would you expect the Orioles to win more or fewer games? Almost everyone implicitly understands why the umpires should not be allowed to own teams they referee.
In a free-market economic system, the government is supposed to be the referee and not a player. Its job is to set and enforce the rules, but if it is allowed to also become a player, by owning and managing business enterprises, it is unlikely to treat the competing companies fairly, and there will be little check on its own misbehavior. Congress is now debating whether the U.S. government will create its own national health provider. The government is now the majority owner of the nation's biggest automobile manufacturer (General Motors Corp.), the biggest bank (Citigroup Inc.), and the biggest insurance company (American International Group Inc.). The record of government ownership and/or control of companies in the United States and elsewhere has been one long disaster.
Look at the past year alone. The nation's largest man-made environmental disaster (according to the New York Times) was the coal-ash spill in Tennessee on Dec. 28, 2008, caused by negligence at the Tennessee Valley Authority (a federal-government-owned enterprise). By volume, this spill was 48 times bigger than the Exxon Valdez spill. This September, the government formally took over mortgage giants Fannie Mae and Freddie Mac, whose financial holes were many times larger than those of Lehman Brothers Holdings Inc., WorldCom, Enron Corp. or GM. Fannie and Freddie were both U.S. government-sponsored and -regulated companies that had the implicit guarantee of the U.S. taxpayer.
Yet the companies not only failed, but between them have also left the U.S. taxpayer liable for more than $1 trillion. All too many in the mainstream media choose to ignore or underreport government failures while hyping private- company failures. Just look at the press coverage of the Exxon Valdez versus the TVA Tennessee spill, or the coverage given Enron versus Fannie and Freddie."
Thursday, July 16, 2009
High Speed Spending | Randal O'Toole | Cato Institute: Commentary
High Speed Spending | Randal O'Toole | Cato Institute: Commentary: "Would you pay $1,000 so that someone – probably not you – can ride high-speed trains 58 miles a year? That's what the Obama Administration's high-speed rail plan is going to cost every federal income taxpayer in the country."
"Taxpayers will also have to cover operating losses: Amtrak loses $28 to $84 per passenger in most of its short-distance corridors. In 2001, it lost the most - $84 per passenger in the state-subsidized Raleigh-Charlotte corridor."
"As of this writing, $99 will get you from Washington to New York in two hours and fifty minutes on Amtrak's high-speed train, while $49 pays for a moderate-speed train ride that takes three hours and fifteen minutes. Meanwhile, relatively unsubsidized and energy-efficient buses cost $20 for a four-hour-and-fifteen-minute trip with leather seats and free Wi-Fi. Airfares start at $119 for a one-hour flight.
Few people who pay their own way will spend an extra $79 to save an hour and twenty-five minutes of their time. But anyone who values their time that highly would be willing to pay an extra $20 to save an hour by taking the plane. The train's only advantage is for people who are going from downtown to downtown.
Who works downtown? Bankers, lawyers, government officials, and other high-income people who hardly need subsidized transportation. Not only will you pay $1,000 for someone else to ride the train; that someone probably earns more than you."
"Taxpayers will also have to cover operating losses: Amtrak loses $28 to $84 per passenger in most of its short-distance corridors. In 2001, it lost the most - $84 per passenger in the state-subsidized Raleigh-Charlotte corridor."
"As of this writing, $99 will get you from Washington to New York in two hours and fifty minutes on Amtrak's high-speed train, while $49 pays for a moderate-speed train ride that takes three hours and fifteen minutes. Meanwhile, relatively unsubsidized and energy-efficient buses cost $20 for a four-hour-and-fifteen-minute trip with leather seats and free Wi-Fi. Airfares start at $119 for a one-hour flight.
Few people who pay their own way will spend an extra $79 to save an hour and twenty-five minutes of their time. But anyone who values their time that highly would be willing to pay an extra $20 to save an hour by taking the plane. The train's only advantage is for people who are going from downtown to downtown.
Who works downtown? Bankers, lawyers, government officials, and other high-income people who hardly need subsidized transportation. Not only will you pay $1,000 for someone else to ride the train; that someone probably earns more than you."
Detainees, Even if Acquitted, Might Not Go Free - Political News - FOXNews.com
Detainees, Even if Acquitted, Might Not Go Free - Political News - FOXNews.com: "The Obama administration said Tuesday it could continue to imprison non-U.S. citizens indefinitely even if they have been acquitted of terrorism charges by a U.S. military commission.
Jeh Johnson, the Defense Department's chief lawyer, told the Senate Armed Services Committee that releasing a detainee who has been tried and found not guilty was a policy decision that officials would make based on their estimate of whether the prisoner posed a future threat.
Like the Bush administration, the Obama administration argues that the legal basis for indefinite detention of aliens it considers dangerous is separate from war-crimes prosecutions. Officials say that the laws of war allow indefinite detention to prevent aliens from committing warlike acts in future, while prosecution by military commission aims to punish them for war crimes committed in the past."
Jeh Johnson, the Defense Department's chief lawyer, told the Senate Armed Services Committee that releasing a detainee who has been tried and found not guilty was a policy decision that officials would make based on their estimate of whether the prisoner posed a future threat.
Like the Bush administration, the Obama administration argues that the legal basis for indefinite detention of aliens it considers dangerous is separate from war-crimes prosecutions. Officials say that the laws of war allow indefinite detention to prevent aliens from committing warlike acts in future, while prosecution by military commission aims to punish them for war crimes committed in the past."
Iran's Failed Revolution | Doug Bandow | Cato Institute: Commentary
Iran's Failed Revolution | Doug Bandow | Cato Institute: Commentary: "For a quarter century Washington backed the shah's dictatorship. After years of repression, Islamic fundamentalists emerged stronger than liberal secularists, leading to the creation of the Islamic Republic in 1979. Then the United States supported Iraq's Saddam Hussein after he invaded Iran. Later, President George W. Bush termed Iran a member of the 'Axis of Evil' even as his administration destroyed the Iraqi regime which had helped restrain Tehran's regional ambitions."
"This history continues to afflict America's relationship with Iranians. Persistent threats of military strikes and cheery jingles about bombing campaigns—which undoubtedly would have killed some of the demonstrators whose cause the U.S. government now champions—also taint Washington's call for democracy. So, too, the preelection admission of such neoconservatives as Max Boot and Daniel Pipes that they would prefer the reelection of Iranian President Ahmadinejad. Not all Iranians are likely to see Washington as a disinterested advocate of the best interests of the Iranian people."
"But for the U.S. government to be perceived as interfering—yet again—in Iran's affairs would retard rather than accelerate reform. Ahmadinejad has won on force but lost on legitimacy: Moussavi, fellow reform candidate Mehdi Karroubi, and former-President Mohammad Khatami continue to criticize the fraudulent result. The worst thing Washington could do is turn the issue into a conflict between the U.S. and Iranian governments instead of one between the Iranian government and its people. And if Moussavi unexpectedly triumphed, the United States would not want to be tied to him either. After all, he looks moderate only in comparison to Ahmadinejad."
"However, the nuclear issue is too important to leave unaddressed. Military strikes might only delay Iran's possible development of nuclear weapons. Moreover, such an attack would increase Tehran's incentive to develop an arsenal. U.S. intelligence does not believe that Iran has an active weapons program underway, though the mullahs may hope to create "turn-key" capability; military action likely would remove any doubt in the regime's mind about the desirability of possessing an atomic deterrent.
Moreover, war would destroy the democracy movement and solidify support for the regime. Worse, the violent, destabilizing consequences would ripple throughout the Muslim and Arab worlds, starting next door in Iraq, where one hundred thirty one thousand U.S. troops remain on station."
"This history continues to afflict America's relationship with Iranians. Persistent threats of military strikes and cheery jingles about bombing campaigns—which undoubtedly would have killed some of the demonstrators whose cause the U.S. government now champions—also taint Washington's call for democracy. So, too, the preelection admission of such neoconservatives as Max Boot and Daniel Pipes that they would prefer the reelection of Iranian President Ahmadinejad. Not all Iranians are likely to see Washington as a disinterested advocate of the best interests of the Iranian people."
"But for the U.S. government to be perceived as interfering—yet again—in Iran's affairs would retard rather than accelerate reform. Ahmadinejad has won on force but lost on legitimacy: Moussavi, fellow reform candidate Mehdi Karroubi, and former-President Mohammad Khatami continue to criticize the fraudulent result. The worst thing Washington could do is turn the issue into a conflict between the U.S. and Iranian governments instead of one between the Iranian government and its people. And if Moussavi unexpectedly triumphed, the United States would not want to be tied to him either. After all, he looks moderate only in comparison to Ahmadinejad."
"However, the nuclear issue is too important to leave unaddressed. Military strikes might only delay Iran's possible development of nuclear weapons. Moreover, such an attack would increase Tehran's incentive to develop an arsenal. U.S. intelligence does not believe that Iran has an active weapons program underway, though the mullahs may hope to create "turn-key" capability; military action likely would remove any doubt in the regime's mind about the desirability of possessing an atomic deterrent.
Moreover, war would destroy the democracy movement and solidify support for the regime. Worse, the violent, destabilizing consequences would ripple throughout the Muslim and Arab worlds, starting next door in Iraq, where one hundred thirty one thousand U.S. troops remain on station."
Paulson Justifies Threatening BofA's CEO - Political News - FOXNews.com
Paulson Justifies Threatening BofA's CEO - Political News - FOXNews.com: "'It is a threat to the foundations of our free society when government officials, acting in the midst of a crisis, use dire predictions of imminent disaster to justify their encroachment on our individual liberty and the rule of law,' said Issa.
In prepared testimony, Paulson said he told Bank of America CEO Kenneth Lewis last year that reneging on his promise to purchase Merrill would show a 'colossal lack of judgment.'
Paulson said that 'under such circumstances,' the Federal Reserve would be justified in removing management at the bank."
In prepared testimony, Paulson said he told Bank of America CEO Kenneth Lewis last year that reneging on his promise to purchase Merrill would show a 'colossal lack of judgment.'
Paulson said that 'under such circumstances,' the Federal Reserve would be justified in removing management at the bank."
Heavy Foot of Government | Richard W. Rahn | Cato Institute: Commentary
Heavy Foot of Government | Richard W. Rahn | Cato Institute: Commentary: "The stimulus bill is objectively not working as promised by the advocates because, as many correctly warned, it is not possible for either individuals or governments to spend themselves into prosperity, nor will the political forces allow tax revenues to be spent wisely and effectively. If you look at the Obama officials' unemployment projections (with and without the stimulus bill), as well as the actual unemployment numbers, it is ironic that, if those in the Obama administration had not put forth the stimulus bill, the economy, by their own projections, would probably have been better off."
"If governments try to control prices, oil companies and investors will invest less in new production, thus reducing future supply, which will lead to higher prices in the future. Speculators are necessary to allow producers to shift part of the risk of their investments."
"And if speculation were as risklessly profitable as [the critics] presume it to be, then high gasoline prices would pose no problem because everyone would be raking in the riches by speculating in oil markets."
"If governments try to control prices, oil companies and investors will invest less in new production, thus reducing future supply, which will lead to higher prices in the future. Speculators are necessary to allow producers to shift part of the risk of their investments."
"And if speculation were as risklessly profitable as [the critics] presume it to be, then high gasoline prices would pose no problem because everyone would be raking in the riches by speculating in oil markets."
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