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Year After TARP: $700 Billion Down the Drain - Randall G. Holcombe - Mises Institute: "It is easy to say the program wasn't necessary, despite Paulson's arguments, because the TARP money wasn't used to buy toxic assets. TARP money was instead used to buy preferred stock in banks, shoring up their balance sheets by giving the federal government part ownership of the banks.
Nine of the largest banks were forced to issue stock to the Treasury, paid for with TARP money, even though several of the banks tried to opt out. Secretary Paulson said that if some of the big banks participated and others didn't, it would identify their varying levels of weakness, which Paulson believed was undesirable.
Instead of buying up toxic assets, the TARP money was used to partially nationalize the banking industry. It was also used for a federal takeover of AIG (after it was initially rescued by the Fed) and the bailout of Chrysler and General Motors."
(Accompanying graph shows that commercial and industrial loans dropped when TARP passed.)
Monday, November 02, 2009
Social Security's Coming Crash: The Certain End of Entitlement | Doug Bandow | Cato Institute: Commentary
Social Security's Coming Crash: The Certain End of Entitlement | Doug Bandow | Cato Institute: Commentary: "U.S. GDP is about $14 trillion. One year of economic output already is committed to paying off the national debt, which is now above $12 trillion and climbing fast."
"Finally, there are Social Security and Medicare. Together, they have about $107 trillion in 'unfunded liabilities.' In real-people-speak, that is the difference between promised benefits and expected revenues. That amounts to about eight years of America's economic production and twice the world's annual GDP."
"Even before last fall's financial crash, then-comptroller general David M. Walker warned, 'The only thing the United States is able to do a little after 2040 is pay interest on massive and growing federal debt. The model blows up in the mid-2040s.'"
"Last fall's stock-market collapse demonstrates that private markets offer no guarantees. But that uncertainty should be contrasted with the certain bad deal from the federal government. Moreover, the return on private investment has remained well above the levels for Social Security even when measured against major stock-market downturns. The rate of return was over three percent annually, handily beating Social Security's return these days, for even the worst 20-year period in American history, which encompasses the Great Depression."
"Finally, there are Social Security and Medicare. Together, they have about $107 trillion in 'unfunded liabilities.' In real-people-speak, that is the difference between promised benefits and expected revenues. That amounts to about eight years of America's economic production and twice the world's annual GDP."
"Even before last fall's financial crash, then-comptroller general David M. Walker warned, 'The only thing the United States is able to do a little after 2040 is pay interest on massive and growing federal debt. The model blows up in the mid-2040s.'"
"Last fall's stock-market collapse demonstrates that private markets offer no guarantees. But that uncertainty should be contrasted with the certain bad deal from the federal government. Moreover, the return on private investment has remained well above the levels for Social Security even when measured against major stock-market downturns. The rate of return was over three percent annually, handily beating Social Security's return these days, for even the worst 20-year period in American history, which encompasses the Great Depression."
Market Power - The Mistake of Subsidizing Pet Energy Causes | Jerry Taylor and Peter Van Doren | Cato Institute: Commentary
Market Power - The Mistake of Subsidizing Pet Energy Causes | Jerry Taylor and Peter Van Doren | Cato Institute: Commentary: "The story most conservatives tell about energy policy is different from the stories they tell about other economic-policy matters. Rather than defend free markets, they bang the table about the need for national energy plans and government timetables for energy-plant construction. (For example, see Lamar Alexander elsewhere in this issue.) We're told that markets will fail to provide the energy we need, fail to prevent demand for energy from surging beyond reason, and fail to attain suchimportant objectives as environmental quality and a strong national defense.
The conservative case for government intervention in energy markets is just as flimsy as the liberal case for government intervention in any other sector of the economy. Energy markets may not work as perfectly as in a textbook model, but they work — and government works even less perfectly."
"Most conservatives seem to believe that a reduction in imports will insulate us from price shocks caused by developments overseas. That is nonsense. A supply disruption anywhere will increase the price of crude oil everywhere for the same reason that an early frost in Florida will increase the price of citrus produced in Florida and California by roughly the same amount."
"Others fear that reliance on imports requires us to undertake military commitments to ensure that oil continues to flow. But producers have even more reason to worry about the safety of their facilities than we do and, likewise, more reason to ensure the security of international oil-shipping lanes. Hence, they have every incentive to defend their oil infrastructure, whether we help foot the bill or not."
"Consider the current love affair of the Right with "clean coal" technology. Billions of federal tax dollars have been spent since the 1980s on various iterations of this concept — most recently via George W. Bush's "FutureGen" project and the "Clean Coal Power Initiative" — yet the marketplace has not been friendly to new coal plants. From 2001 through 2007, 179,382 megawatts of natural-gas-fired electric generators were added, but only 3,311 megawatts of coal-fired generation capacity came online.
It's not that we don't know how to make coal facilities cleaner — it's that we don't know how to make coal plants both cleaner and profitable. Throwing more tax money at this riddle will not necessarily produce an answer. Why are conservatives doubling down on the same ill-fated taxpayer adventure that Ronald Reagan labored so mightily to kill in the 1980s?"
"Despite promises in the 1950s that nuclear power would soon become "too cheap to meter," 50 years of lavish federal subsidies and regulatory preferences have yet to produce an industry that can turn a profit without taxpayer help."
The conservative case for government intervention in energy markets is just as flimsy as the liberal case for government intervention in any other sector of the economy. Energy markets may not work as perfectly as in a textbook model, but they work — and government works even less perfectly."
"Most conservatives seem to believe that a reduction in imports will insulate us from price shocks caused by developments overseas. That is nonsense. A supply disruption anywhere will increase the price of crude oil everywhere for the same reason that an early frost in Florida will increase the price of citrus produced in Florida and California by roughly the same amount."
"Others fear that reliance on imports requires us to undertake military commitments to ensure that oil continues to flow. But producers have even more reason to worry about the safety of their facilities than we do and, likewise, more reason to ensure the security of international oil-shipping lanes. Hence, they have every incentive to defend their oil infrastructure, whether we help foot the bill or not."
"Consider the current love affair of the Right with "clean coal" technology. Billions of federal tax dollars have been spent since the 1980s on various iterations of this concept — most recently via George W. Bush's "FutureGen" project and the "Clean Coal Power Initiative" — yet the marketplace has not been friendly to new coal plants. From 2001 through 2007, 179,382 megawatts of natural-gas-fired electric generators were added, but only 3,311 megawatts of coal-fired generation capacity came online.
It's not that we don't know how to make coal facilities cleaner — it's that we don't know how to make coal plants both cleaner and profitable. Throwing more tax money at this riddle will not necessarily produce an answer. Why are conservatives doubling down on the same ill-fated taxpayer adventure that Ronald Reagan labored so mightily to kill in the 1980s?"
"Despite promises in the 1950s that nuclear power would soon become "too cheap to meter," 50 years of lavish federal subsidies and regulatory preferences have yet to produce an industry that can turn a profit without taxpayer help."
Ford Reports Surprise $1 Billion 3Q Profit - Local News | News Articles | National News | US News - FOXNews.com
Ford Reports Surprise $1 Billion 3Q Profit - Local News | News Articles | National News | US News - FOXNews.com: "Ford also has benefited from consumer goodwill after it declined government bailout money and didn't go into bankruptcy over the summer as GM and Chrysler did. Ford grabbed sales from its rivals, posting the largest increase in market share of any automaker in September. Ford expects an overall gain in U.S. market share in 2009, a feat it hasn't accomplished since 1995."
Study: File sharers spend more money on music | Technically Incorrect - CNET News
Study: File sharers spend more money on music | Technically Incorrect - CNET News: "This survey found that 10 percent of the respondents, age range 16-50, admitted illegal downloading. But what might have been instructive would have been to learn just how much music people bought for their average of 77 pounds (around $120) per month and how they made their choice as to what should be bought and what should merely be, um, borrowed."
Friday, October 30, 2009
FAA Slow to Alert Military of Wayward Plane - Local News | News Articles | National News | US News - FOXNews.com
FAA Slow to Alert Military of Wayward Plane - Local News | News Articles | National News | US News - FOXNews.com: "The Federal Aviation Administration violated its own rules by taking more than 40 minutes to alert the military after losing communication with a Northwest Airlines flight last week, according to officials familiar with internal reviews under way at several federal agencies."
It's a good thing that we have the government keep us safe. It just goes to show that the government isn't designed to be good at everything and shouldn't try to tackle everything.
It's a good thing that we have the government keep us safe. It just goes to show that the government isn't designed to be good at everything and shouldn't try to tackle everything.
Clinton Faces Pakistani Anger at Drone Attacks - FOXNews.com
Clinton Faces Pakistani Anger at Drone Attacks - FOXNews.com: "one member of the audience said the Predator attacks amount to 'executions without trial' for those killed.
Another asked Clinton how she would define terrorism.
'Is it the killing of people in drone attacks?' she asked. That woman then asked if Clinton considers drone attacks and bombings like the one that killed more than 100 civilians in the city of Peshawar earlier this week to both be acts of terrorism."
'The same man told Clinton that the Obama administration should rely more on wisdom and less on firepower to achieve its aims in Pakistan.
"Your presence in the region is not good for peace," he said, referring to the U.S. military, "because it gives rise to frustration and irritation among the people of this region." At another point he told Clinton, "Please forgive me, but I would like to say we've been fighting your war."
A similar point was made by Sana Bucha of Geo TV during the live broadcast interview.
"It is not our war," she told Clinton. "It is your war." She drew a burst of applause when she added, "You had one 9/11. We are having daily 9/11s in Pakistan."'
Another asked Clinton how she would define terrorism.
'Is it the killing of people in drone attacks?' she asked. That woman then asked if Clinton considers drone attacks and bombings like the one that killed more than 100 civilians in the city of Peshawar earlier this week to both be acts of terrorism."
'The same man told Clinton that the Obama administration should rely more on wisdom and less on firepower to achieve its aims in Pakistan.
"Your presence in the region is not good for peace," he said, referring to the U.S. military, "because it gives rise to frustration and irritation among the people of this region." At another point he told Clinton, "Please forgive me, but I would like to say we've been fighting your war."
A similar point was made by Sana Bucha of Geo TV during the live broadcast interview.
"It is not our war," she told Clinton. "It is your war." She drew a burst of applause when she added, "You had one 9/11. We are having daily 9/11s in Pakistan."'
Physicist Howard Hayden's one-letter disproof of global warming claims - Stephan Kinsella - Mises Economics Blog
Physicist Howard Hayden's one-letter disproof of global warming claims - Stephan Kinsella - Mises Economics Blog: "It has been often said that the 'science is settled' on the issue of CO2 and climate. Let me put this claim to rest with a simple one-letter proof that it is false.
The letter is s, the one that changes model into models. If the science were settled, there would be precisely one model, and it would be in agreement with measurements.
Alternatively, one may ask which one of the twenty-some models settled the science so that all the rest could be discarded along with the research funds that have kept those models alive.
We can take this further. Not a single climate model predicted the current cooling phase. If the science were settled, the model (singular) would have predicted it."
"The earth, it seems, has seen times when the CO2 concentration was up to 8,000 ppm, and that did not lead to a tipping point. If it did, we would not be here talking about it. In fact, seen on the long scale, the CO2 concentration in the present cycle of glacials (ca. 200 ppm) and interglacials (ca. 300-400 ppm) is lower than it has been for the last 300 million years."
"But what would we have to fear if CO2 and temperature actually increased?
A warmer world is a better world. Look at weather-related death rates in winter and in summer, and the case is overwhelming that warmer is better.
The higher the CO2 levels, the more vibrant is the biosphere, as numerous experiments in greenhouses have shown. But a quick trip to the museum can make that case in spades. Those huge dinosaurs could not exist anywhere on the earth today because the land is not productive enough. CO2 is plant food, pure and simple.
CO2 is not pollution by any reasonable definition.
A warmer world begets more precipitation.
All computer models predict a smaller temperature gradient between the poles and the equator. Necessarily, this would mean fewer and less violent storms.
The melting point of ice is 0 ºC in Antarctica, just as it is everywhere else. The highest recorded temperature at the South Pole is -14 ºC, and the lowest is -117 ºC. How, pray, will a putative few degrees of warming melt all the ice and inundate Florida, as is claimed by the warming alarmists?"
The letter is s, the one that changes model into models. If the science were settled, there would be precisely one model, and it would be in agreement with measurements.
Alternatively, one may ask which one of the twenty-some models settled the science so that all the rest could be discarded along with the research funds that have kept those models alive.
We can take this further. Not a single climate model predicted the current cooling phase. If the science were settled, the model (singular) would have predicted it."
"The earth, it seems, has seen times when the CO2 concentration was up to 8,000 ppm, and that did not lead to a tipping point. If it did, we would not be here talking about it. In fact, seen on the long scale, the CO2 concentration in the present cycle of glacials (ca. 200 ppm) and interglacials (ca. 300-400 ppm) is lower than it has been for the last 300 million years."
"But what would we have to fear if CO2 and temperature actually increased?
A warmer world is a better world. Look at weather-related death rates in winter and in summer, and the case is overwhelming that warmer is better.
The higher the CO2 levels, the more vibrant is the biosphere, as numerous experiments in greenhouses have shown. But a quick trip to the museum can make that case in spades. Those huge dinosaurs could not exist anywhere on the earth today because the land is not productive enough. CO2 is plant food, pure and simple.
CO2 is not pollution by any reasonable definition.
A warmer world begets more precipitation.
All computer models predict a smaller temperature gradient between the poles and the equator. Necessarily, this would mean fewer and less violent storms.
The melting point of ice is 0 ºC in Antarctica, just as it is everywhere else. The highest recorded temperature at the South Pole is -14 ºC, and the lowest is -117 ºC. How, pray, will a putative few degrees of warming melt all the ice and inundate Florida, as is claimed by the warming alarmists?"
Wednesday, October 28, 2009
Money in War-Ravaged Iraq - Edward Gonzalez - Mises Institute
Money in War-Ravaged Iraq - Edward Gonzalez - Mises Institute: "In the villages, houses and boats needed to be repaired or rebuilt, roads needed attention, and parents wanted to get their children back in school. In order to do all these wonderful things, a medium of exchange was needed. Unfortunately, or fortunately, depending onhow you look at it, the villagers did not put much faith in the paper money printed by the government in Baghdad.
As this was an agrarian society the villagers turned to a time-tested medium of exchange: livestock"
"With these three free market currencies, I watched village markets grow, farmers increase productivity, fisherman save capital in order to improve or build new boats, and young couples commission houses to be built with borrowed money. All this progress was made possible through the real savings of valuable commodities.
So, for those who are deeply worried about a currency crisis in the United States, I bear a positive message. When a currency fails, as long as there is no outside coercion implemented, individuals will act and find sound money in what is around them. Gold and silver will certainly be prime candidates, but even in small towns with limited access to these precious metals, there is an infinite supply of sound money available."
As this was an agrarian society the villagers turned to a time-tested medium of exchange: livestock"
"With these three free market currencies, I watched village markets grow, farmers increase productivity, fisherman save capital in order to improve or build new boats, and young couples commission houses to be built with borrowed money. All this progress was made possible through the real savings of valuable commodities.
So, for those who are deeply worried about a currency crisis in the United States, I bear a positive message. When a currency fails, as long as there is no outside coercion implemented, individuals will act and find sound money in what is around them. Gold and silver will certainly be prime candidates, but even in small towns with limited access to these precious metals, there is an infinite supply of sound money available."
Now That Ireland Has Caved | Doug Bandow | Cato Institute: Commentary
Now That Ireland Has Caved | Doug Bandow | Cato Institute: Commentary: "How dare the Irish thwart the will of 500 million Europeans, not that any of the other 495 million had been allowed to express that will at the polls? Declan Ganley, head of the group Libertas, wrote: 'we Irish behaved badly, and were therefore required as a matter of course to vote again. Nearly every EU leader agrees with this. Their own people must not vote, but the Irish must vote twice.'"
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