February 20, 2009

The market's judgment

Posted by George Leef at 4:27 PM

George Bittlingmayer and Thomas Hazlett contend here that the market has turned thumbs down on Obama's ridiculous notion that much more government spending and control is the way back to prosperity. I couldn't agree more. Obama and Company may think that their Keynesmobile is a great product, but most people who actually have money at risk can see that it's a total clunker.

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Wait, so now someone could "waste" Obama's "stimulus" money?

Posted by Jon Sanders at 2:55 PM

Please, the whole blasted rationale behind this stimulus behemoth is reanimated Keynesianism. You can't "waste" government stimulus money, according to the theory. The only supposed waste is the money not given out, the money not subjected to the magical multiplier effect; i.e., the only folks who could waste this money are the governors who threaten to turn down the stimulus money because of fears of strings attached and funded mandates becoming unfunded.

Obama's admitting that Keynesian stimulus spending can be wasted is an Oz-behind-the-curtain screwup. It's one thing for a naif to be enchanted by the notion that only government spending can rescue the economy (somehow despite the Bush record of rapidly growing federal spending); it takes an entirely unheard-of level of gullibility to think the market will revive with such spending but only if it isn't blown on politics as usual or other forms of waste. What, are we now supposed to believe that the market will automatically discount spending by rent-seekers, graft-takers and corruption artists?

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Day care demand down

Posted by Joseph Coletti at 1:07 PM

As more people lose their jobs, their desire and ability to pay for day care has declined. But what makes the day care industry different from others? "The loss of children is straining an already fragile industry, which operates under heavy government regulation and with thin profit margins," reports the Mandy Locke (nice name). Does that heavy regulation make it difficult for centers to adjust to the new economics?

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Making mental hospitals safe for patients

Posted by Joseph Coletti at 12:13 AM

Faced with losing $1.2 million/month in federal funds of the $10 million/month they spend, the state-run mental hospital in Butner has come up with a plan:

In an attempt to keep its federal funding for Central Regional, the hospital told federal administrators it would start an anti-abuse campaign, with posters for the wards and cards for all employees to carry that say "No Abuse -- Not Now, Not Ever."

That should do the trick - a poster. Might I suggest a more honest one?

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Play by the rules, get punished by Uncle Sam

Posted by David N. Bass at 11:19 AM

U.S. Rep. Mel Watt, a Democrat representing North Carolina's 12th congressional district (which is drawn sorta funny), recently met with constituents in Rowan County to discuss the stimulus bill.

The Salisbury Post reported this anecdote from the Q&A:

One woman said she and her husband had been conservative with their finances over the years, paying off their house and putting their children through college.

She asked how the stimulus package was going to help them.

Watt said he was glad to address any question thrown at him, but said he couldn't throw out blanket statements, noting that everyone in the room would be affected in different ways.

"I'd have to analyze your entire situation," Watt told the woman. "I don't think we can address that in this situation."

You see, according to Keynesian economic theory, fiscal responsibility, either for individuals or the government, is a big no-no. Saving? Avoiding debt? Thoroughly un-American concepts!

In fact, if you played by the rules, this stimulus bill punishes you. If you paid your bills and avoided insane sub-prime mortgages, you get short shrift. Your neighbor, who over-extended, gets rewarded.

Last time I checked, that's called moral hazard.

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State Health Plan blames smokers and eaters

Posted by Joseph Coletti at 11:18 AM

Instead of moving to a consumer-directed plan such as a high-deductible policy with a health savings account, the state health plan is simply rounding up the usual suspects - smokers and the overweight - to pay higher premiums. Odds are they'll still ask taxpayers to foot some of the bill, too.

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Progressives see problems with MassCare

Posted by Joseph Coletti at 11:06 AM

They disagree on whether the Connector and other efforts have increased coverage, but agree that the cost is huge.

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Rick Santelli's Chicago Tea Party

Posted by Dr. Michael Sanera at 10:58 AM

As Roy, Jon and David reported yesterday, CNBC's Rick Santelli set off a firestorm yesterday with his attack on Obama's home foreclosure bailout plan.  

 He is everywhere now including National Review Online.  Here is the conclusion to his NRO interview.  

At the end of the day, it’s simple. A lot of the president’s advisers are saying that there’s a multiplier effect to the government money, and it’s over one. Now if that’s true, then the government should spend non-stop for the rest of our lives, because we’ll get a positive return. And it makes no sense. ... I guess in the end, I believe in the founding fathers, and I believe that in America... the pursuit of happiness and to work hard and keep the fruits of your labor is something I believe in. And I’m not saying we should forget people who need help. But at the end of the day, Americans are strong and they’re charitable. I think what they have a problem with is that it’s force-fed via the government.
 

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Stimulus bill worse than doing nothing

Posted by George Leef at 10:04 AM

New York University economics professor Mario Rizzo takes a microeconomic look at the recession and the Obama administration's ridiculous "stimulus" cure here.

A key point Rizzo makes is that the "stimulus" bill is meant in large part to prop up the sector of the economy (housing) that most needs to shrink because it overexpanded during the Fed's cheap money boom.

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Sanford vs. Crist

Posted by Joseph Coletti at 09:12 AM

Mark Sanford shows a way forward. Charlie Crist does not.

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Don't just stand there, un-do something!

Posted by George Leef at 09:08 AM

In his column today, Sheldon Richman argues that the best governmental response to a recession is the precise opposite of the course taken by Bush and Obama -- instead of more government activity, we need less.

That is, when the economy turns down (always a consequence of previous governmental actions that caused discoordination between what some producers were doing and what consumers really wanted), the best policy would be to cut taxes and also cut unnecessary government spending, thereby freeing up resources for the private sector to use productively.

It's the great fable of our times that government officials can run the economy. All they can do is to impede its efficient use of resources to produce the goods and services that are most desired by consumers.

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Name the year

Posted by Dr. Terry Stoops at 08:13 AM

On February 18, ____, the New York Times reported,

WASHINGTON, Feb. 17. - The Home Owners Loan Corporation announced today virtual completion of its emergency task of refinancing home loans.

As of Feb. 6, the HOLC reported, it had granted refinancing loans to 987,833 home owners who had been threatened with foreclosure. The amount of these loans was reported at $2,990,418,259, which officials declared, "represents about one-sixth of the entire estimated urban home hortgage debt now outstanding in the United States."

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Yes, it's tooth fairy economics

Posted by George Leef at 07:43 AM

Tom Woods, author of the new book Meltdown (Regnery Publishing) contends here that the Obama economic program is tooth fairy economics. He refutes the Keynesian argument that during a recession, we must have increased government spending to put "idle resources" back to work.

It may put some back to work, but on projects chosen through politics, always a means of getting little benefit for a lot of cost. If politicians allow competition in the free market to work, fairly soon all those idle resources are put back to work where they can be used profitably. That's exactly what happened the last time we have a severe recession and the federal government responded properly -- by cutting taxes and spending. That was in 1921 under President Harding.

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A poor choice

Posted by Mitch Kokai at 07:05 AM

The latest U.S. News also includes a list of five “Market movers who are losing influence.” You can argue about the other choices, but one name on the list never should have ended up with this dubious distinction: the late, great Milton Friedman.

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Correcting the record

Posted by Mitch Kokai at 07:03 AM

I realize this isn't the Great Depression. But what do you think are the most relevant lessons from that time?

History is always written by the winners, and Hoover gets blamed for the depression while the Democrats get credit for ending it. But Hoover did more to try to help the economy than any other president up till that time. Before then, the attitude was generally, let the market take care of it. Hoover signed the Federal Home Loan Bank Act of 1931 and tried a lot of other things.

Of course he also signed the Smoot-Hawley Act. Hoover promised struggling Midwestern farmers protection from foreign competition, and then everybody got that kind of protection. And that was a disaster.

I can think of some pundits (cough, cough, Jonathan Alter, cough, cough) who could benefit from learning more about the real history of the Great Depression.

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In case you missed it …

Posted by Mitch Kokai at 06:58 AM

John Locke Foundation folks contributed to WTVD’s lead stories at 5 p.m. and 5:30 p.m. Thursday. John Hood offered his thoughts about unemployment insurance to Gerrick Brenner at 5. You can hear his comments by clicking play below.

Meanwhile, Tim Nelson asked me about two new high-paying, high-profile jobs in state government.

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This weekend on Carolina Journal Radio

Posted by Mitch Kokai at 06:57 AM

You’ll also hear highlights from a recent legislative debate on annexation reform, and Terry Stoops will join us to discuss his latest report on North Carolina teacher pay.

Long-time capital reporter Scott Mooneyham will share his thoughts about the prospect of state government layoffs, and the Pope Center’s Jay Schalin will discuss interesting developments in his coverage of N.C. State University’s Millennium Series.

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Today's Carolina Journal Online features

Posted by Mitch Kokai at 06:50 AM

This week's Carolina Journal Friday interview features a conversation with the Wall Street Journal's Dan Henninger about the impact of bad information on political debate. 

Speaking of bad information, the guest Daily Journal from Donna Martinez explains how politicians cause harm when they build irrational fear about global warming into public policy.

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