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No Way to Run an Economy | Daniel J. Mitchell | Cato Institute: Commentary: "In the GM/Chrysler bailout, Washington intervened in the bankruptcy process and arbitrarily tilted the playing field to help politically powerful creditors at the expense of others. Not only did this put taxpayers on the hook for big losses, it also created a precedent for future interventions.
This precedent makes it more difficult to feel confident that the rule of law will be respected in the future when companies get in trouble. It also means investors will be less willing to put money into weak firms. That's not good for workers, and not good for the economy."
Monday, October 08, 2012
The Federal Reserve: From Central Bank to Central Planner | John H. Cochrane | Cato Institute: Commentary
The Federal Reserve: From Central Bank to Central Planner | John H. Cochrane | Cato Institute: Commentary: "Open-market operations do not have direct fiscal consequences, or directly allocate credit. That was the price of the Fed's independence, allowing it to do one thing—conduct monetary policy—without short-term political pressure. But an agency that allocates credit to specific markets and institutions, or buys assets that expose taxpayers to risks, cannot stay independent of elected, and accountable, officials.
In addition, the Fed is now a gargantuan financial regulator. Its inspectors examine too-big-to-fail banks, come up with creative "stress tests" for them to pass, and haggle over thousands of pages of regulation. When we think of the Fed 10 years from now, on current trends, we're likely to think of it as financial czar first, with monetary policy the boring backwater."
"Using its bank-regulation authority, the Fed declared that the banks that had robo-signed foreclosure documents were guilty of "unsafe and unsound processes and practices"—though robo-signing has nothing to do with the banks taking too much risk.
The Fed then commanded that the banks provide $25 billion in "mortgage relief," a simple transfer from bank shareholders to mortgage borrowers—though none of these borrowers was a victim of robo-signing.
The Fed even commanded that the banks give money to "nonprofit housing counseling organizations, approved by the U.S. Department of Housing and Urban Development." "
In addition, the Fed is now a gargantuan financial regulator. Its inspectors examine too-big-to-fail banks, come up with creative "stress tests" for them to pass, and haggle over thousands of pages of regulation. When we think of the Fed 10 years from now, on current trends, we're likely to think of it as financial czar first, with monetary policy the boring backwater."
"Using its bank-regulation authority, the Fed declared that the banks that had robo-signed foreclosure documents were guilty of "unsafe and unsound processes and practices"—though robo-signing has nothing to do with the banks taking too much risk.
The Fed then commanded that the banks provide $25 billion in "mortgage relief," a simple transfer from bank shareholders to mortgage borrowers—though none of these borrowers was a victim of robo-signing.
The Fed even commanded that the banks give money to "nonprofit housing counseling organizations, approved by the U.S. Department of Housing and Urban Development." "
Correction: Guns-Public Health story | Fox News
Correction: Guns-Public Health story | Fox News: "Is a gun like a virus, a car, tobacco or alcohol? Yes, say public health experts, who in the wake of recent mass shootings are calling for a fresh look at gun violence as a social disease."
"Gun-carrying — a precursor to gun violence"
Birth is a precursor to being a murder also...
"Gun-carrying — a precursor to gun violence"
Birth is a precursor to being a murder also...
ACLU sues city over claims Christian church being banned from passing out fliers near Mormon temple | Fox News
ACLU sues city over claims Christian church being banned from passing out fliers near Mormon temple | Fox News: "The American Civil Liberties Union of Utah is suing Brigham City, claiming the town is squelching a non-denominational Christian church's free speech by limiting flier distribution near a Mormon temple."
Army's secret chemical testing in St. Louis neighborhoods during Cold War raising new concerns | Fox News
Army's secret chemical testing in St. Louis neighborhoods during Cold War raising new concerns | Fox News: "In the mid-1950s, and again a decade later, the Army used motorized blowers atop a low-income housing high-rise, at schools and from the backs of station wagons to send a potentially dangerous compound into the already-hazy air in predominantly black areas of St. Louis.
Local officials were told at the time that the government was testing a smoke screen that could shield St. Louis from aerial observation in case the Russians attacked.
But in 1994, the government said the tests were part of a biological weapons program and St. Louis was chosen because it bore some resemblance to Russian cities that the U.S. might attack. The material being sprayed was zinc cadmium sulfide, a fine fluorescent powder."
"The area of the secret testing is described by the Army in documents obtained by Martino-Taylor through a Freedom of Information Act request as "a densely populated slum district." About three-quarters of the residents were black."
" "The idea that thousands of Missourians were unwillingly exposed to harmful materials in order to determine their health effects is absolutely shocking," the senator wrote."
Local officials were told at the time that the government was testing a smoke screen that could shield St. Louis from aerial observation in case the Russians attacked.
But in 1994, the government said the tests were part of a biological weapons program and St. Louis was chosen because it bore some resemblance to Russian cities that the U.S. might attack. The material being sprayed was zinc cadmium sulfide, a fine fluorescent powder."
"The area of the secret testing is described by the Army in documents obtained by Martino-Taylor through a Freedom of Information Act request as "a densely populated slum district." About three-quarters of the residents were black."
" "The idea that thousands of Missourians were unwillingly exposed to harmful materials in order to determine their health effects is absolutely shocking," the senator wrote."
The Anti-dissing Strike | Neal McCluskey | Cato Institute: Commentary
The Anti-dissing Strike | Neal McCluskey | Cato Institute: Commentary: "That reality is made clear by the regular refrain of Randi Weingarten, the president of the American Federation of Teachers, of which the CTU is an affiliate. As she wrote in this morning's USA Today, "no one wants to strike ... this strike comes on the heels of numerous steps that left teachers feeling disrespected."
That teachers have been the victims of brutal dissing has been the complaint of their unions for years, a mantra that's coincided especially with efforts to assess teachers' performance using, at least partially, the achievement of their students."
"Of course government schooling doesn't really serve democracy; it serves the people employed by the system. It's a simple matter of incentives: On any given issue politicians will tend to respond to the groups most active on that issue, and no one has greater incentive to be involved in education politics than those who draw their livelihoods from it. And what will they demand? What we'd all like: as much money as possible and no accountability for performance."
That teachers have been the victims of brutal dissing has been the complaint of their unions for years, a mantra that's coincided especially with efforts to assess teachers' performance using, at least partially, the achievement of their students."
"Of course government schooling doesn't really serve democracy; it serves the people employed by the system. It's a simple matter of incentives: On any given issue politicians will tend to respond to the groups most active on that issue, and no one has greater incentive to be involved in education politics than those who draw their livelihoods from it. And what will they demand? What we'd all like: as much money as possible and no accountability for performance."
CBO Demands a Leap of Faith on the Fiscal Cliff | John H. Cochrane | Cato Institute: Commentary
CBO Demands a Leap of Faith on the Fiscal Cliff | John H. Cochrane | Cato Institute: Commentary: "If the government borrows $1 billion and spends it, the CBO will project that this action raises gross domestic product by $1.5 billion. Government workers are counted as “producing” what they cost, so borrowing money to keep them employed generates the same GDP as building a bridge. If the government just gives the money to people, this also raises the CBO’s GDP estimate. Reducing government spending and transfers has the opposite effect."
"What will be the effect of curtailing 99 weeks of unemployment insurance? To the CBO, it will reduce GDP because would-be beneficiaries will consume less. A standard economic analysis predicts that it will have the opposite effect, increasing GDP and bringing down unemployment. That’s because unemployment insurance means some people choose to stay unemployed rather than take lower-paying jobs, or jobs that require them to move."
"To the CBO, tax increases and spending cuts have about the same effect. In my analysis, higher tax rates are more damaging than spending cuts. To me, a revenue-neutral tax reform that took in the same amount of money at much lower marginal rates would be a boon. It would have little effect at all in the CBO’s analysis."
"What will be the effect of curtailing 99 weeks of unemployment insurance? To the CBO, it will reduce GDP because would-be beneficiaries will consume less. A standard economic analysis predicts that it will have the opposite effect, increasing GDP and bringing down unemployment. That’s because unemployment insurance means some people choose to stay unemployed rather than take lower-paying jobs, or jobs that require them to move."
"To the CBO, tax increases and spending cuts have about the same effect. In my analysis, higher tax rates are more damaging than spending cuts. To me, a revenue-neutral tax reform that took in the same amount of money at much lower marginal rates would be a boon. It would have little effect at all in the CBO’s analysis."
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