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February 9, 2009
Nine point seven frigging trillion dollarsPosted by Jon Sanders at 8:34 PM Bloomberg reports: The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages. The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years — Say, if government spending is supposed to save the economy, then why after all that are things even worse now than before? — and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month. Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients’ names have not been disclosed. Linkable Entry
The Woodhouse WarsPosted by Mitch Kokai at 4:37 PM We've shared tales before of the feuding brothers Woodhouse.
They duke it out again — verbally — in the campaign over the Obama administration's proposed pork-barrel stimulus bill. Linkable Entry
State still ignoring teacher-student sex problemPosted by Dr. Terry Stoops at 3:44 PM Between January 20 and February 9, 2009, five North Carolina teachers were arrested for inappropriate sexual conduct with school children.
Last year, I discussed the scope of the problem, but unfortunately, the General Assembly, Department of Public Instruction, and State Board of Education still refuse to address it. Linkable Entry
Bap! Ooof! Ka-pow!Posted by John Hood at 2:49 PM No, I'm not riffing on the stills from the 60's Batman fight scenes. I'm responding with admiration to this recent zinger from David Boaz, executive vice president of the Cato Institute:
“I don't know much about Arne Duncan, President Obama's choice to be Secretary of Education. But I do note this. In seven years running the Chicago public schools, this longtime friend of Obama was apparently not able to produce a single public school that Obama considered good enough for his own children.” Linkable Entry
Global competition cutting health care costsPosted by Mitch Kokai at 2:40 PM If you could travel overseas for medical treatment and save as much as 80 percent of the cost — even when the travel is factored into the bill — would you do it?
A company called IndUShealth finds that more people are answering yes. CEO Rajesh Rao explained during a presentation today to the John Locke Foundation's Shaftesbury Society. Click play below to hear Rao's description of the main factor contributing to the cost differential between medical treatment in the United States and India.
4 p.m. update: Due to a recording glitch, the introduction and first couple of minutes of Rao's presentation are unavailable. Watch the entire 42:07 recording by clicking the play button below.You'll find other John Locke Foundation video presentations here. Linkable Entry
Another reaction to an economic slowdown that's different from governments'Posted by Jon Sanders at 2:38 PM To recap: families tighten their belts, consumers and businesses throttle back spending, and now churches "stretch every dollar and make it count." Meanwhile, governments still avoid adjusting their spending, seek new taxes, and try to piggyback socialist takeovers onto quickly ballooning stimulus gimmicks. Linkable Entry
If that's starvation, I'd hate to see gluttonyPosted by David N. Bass at 2:05 PM U.S. Sen. Claire McCaskill, D-Mo., had this to say about the "stimulus" bill on Meet the Press yesterday:
I do think that there was some spending in the bill that was makeup for a starvation diet under the Bush administration, some important priorities of our party; frankly, of the American people.
As CNSNews.com rightly points out, McCaskill's "starvation diet" was an annual jump of $1.32 trillion in federal spending during the Bush years. What deprivation! Linkable Entry
Mike and Jon on the "newsworthy death" at an abortion clinicPosted by Jon Sanders at 12:59 AM The last time Mike Adams and I hit the same subject the same day in our Townhall columns, UNC-Chapel Hill's favorite administrator was failing to resolve supposed "tension" of the First Amendment again (a stupid excuse for tyrannizing speech that NC State's leaders have since picked up); i.e., he was arguing that the sight of a cross in a nearly 400-year-old church was offensive to the First Amendment, but the sight of 200-pound strippers wasn't. This time, it's over the post-birth abortion at the Florida clinic. Mike writes from a criminal-justice perspective, concluding with several questions asking what the doctor should be charged with, why, and what it would mean. I write from the perspective that perhaps the reason this is a big deal is that it exposes the abortion movement's big lie: that a baby "isn't a baby" till it's born. In abortion doctrine, when a "tumor of the womb" passes through the birth canal into the open air, it suddenly becomes a living child. This Miracle of Transpostvagination is a great mystery and must be, can only be accepted by faith. A true believer cannot allow himself to doubt that life occurs only after birth and not a moment before. Such doubt would lead to a moral crisis of great proportions. A practitioner of abortion who realizes he doesn't know when life begins is in danger of becoming a monster in his own eyes. Linkable Entry
What does our economic future look like?Posted by George Leef at 12:57 AM Peter Schiff forecasts severe inflationary recession here.
If Schiff is correct, what will the political reaction be? I'm afraid I'd bet on greatly increased governmental coercion -- a new New Deal that does at least as much damage to liberty and property as FDR's original. Linkable Entry
Jefferson on the size of governmentPosted by George Leef at 11:51 AM "I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious."
--Thomas Jefferson, letter to Thomas Cooper, 29 November 1802
Imagine what he'd think today! Linkable Entry
Land Transfer Taxes Still Fail In North CarolinaPosted by Chad Adams at 11:36 AM Last week, anti-tax groups were saddened to learn that the Land Transfer Tax in Avery County had passed by 25 votes. Upon recounting however, it appears that the vote was reversed which would mean that North Carolians, when given the chance will have rejected Land Transfer Taxes in EVERY SINGLE INSTANCE! If upheld, congrats to the grass roots of Avery County for rejecting an unnecessary tax promoted openly within the Avery County School system. Measure appears to have failed by 32 votes, official news release forthcoming. Linkable Entry
Do nothingPosted by George Leef at 10:42 AM Economic historian Robert Higgs, writing in the Christian Science Monitor, contends that the best policy for the federal government would be to do nothing.
He's right. The "stimulus" spending will merely shift power and resources to the government, thus depressing our ability to produce goods and services desired by the people. (It will lead to more production of goods and services desired by politicians, but there's little connection between their desires and those of the millions they claim to represent.) Linkable Entry
Surprise, Surprise!!Posted by Dr. Michael Sanera at 10:12 AM Much of the stimulus money will be wasted. When I taught Intro to Public Administration, I would start with a case study entitled "Dumping $1 million on Bakersfield." It illustrated the fact that public agencies have problems spending money fast. Now the case study should be entitled "Dumping 800 billion on the USA."
Note Eileen Norcross of GMU's Mercatus Center is quoted below. Read the entire article here.
Stimulus haste could waste billions, experts say
Caution urged to prevent contract cost overruns
By Robert O’Harrow Jr., Washington Post
Washington - The Obama administration's economic stimulus
plan could end up wasting billions of dollars by attempting to spend
money faster than an overburdened government acquisition system can
manage and oversee it, according to documents and interviews with
contracting specialists.
The
$820 billion stimulus legislation includes provisions aimed at ensuring
oversight of the massive infusion of contracts, state grants and other
measures. At the urging of the administration, those provisions call
for transparency, bid competition, new auditing resources and new
oversight boards.
But
under the terms of the proposals, a depleted contracting work force
would be asked to spend more money more rapidly than ever before, while
also improving competition and oversight. Auditors would be asked to
track surges in spending on projects ranging from bridges and schools
to research of "green" energy and the development of electronic health
records - a challenge made more difficult because many contracts would
be awarded by state agencies.
The
stimulus plan presents a stark choice: The government can spend
unprecedented amounts of money quickly in an effort to jump-start the
economy or it can move more deliberately to thwart the cost overruns
common to federal contracts in recent years.
"You
can't have both," said Eileen Norcross, a senior research fellow at
George Mason University's Mercatus Center who studied crisis spending
in the aftermath of Hurricane Katrina.
"There is no way to get around having to make a choice."
Linkable Entry
George Will on Darwin and LincolnPosted by Dr. Michael Sanera at 09:46 AM Plus Burke, Hayek, Freud, Lord Tennyson, the Scopes monkey trial, Copernicus, Walt Whitman, Marx, the snail darter, and to top it all off climate change. Only Will could string these together here and get his licks in on Congress.
He concludes by quoting columnist Ed Yoder's comment on the Tennessee monkey law and the endangered species act
"Both measures involve legislative interposition in the realm of
biological change; and which will have involved the greater hubris is
yet to be seen. Tennessee's ambitions were comparatively modest. It
sought only to conceal the disturbing evidence of natural selection
from impressionable school children. The Congress of the United States,
one is intrigued to learn, intends to stop the nasty business in its
tracks."
Having accomplished that, it should be child's play for
Congress to make the climate behave. Pick your own meaning of "child's
play."
Linkable Entry
Business prudence undone by governmentPosted by George Leef at 09:04 AM Business leaders used to be expected to act with prudence, but in recent decades that idea has been undone by government, pushing business to act "in the public interest." The result is not to make things better, but to waste resources and harm individuals. Robert Bradley makes that case in this IBD editorial. Linkable Entry
Grammy recapPosted by Dr. Terry Stoops at 07:51 AM It was a Barack Obama lovefest last night at the Grammys. For example, Recording Academy President Neil Portnow called on the two-time Grammy award winner to create a Secretary of the Arts cabinet position. (Look for it to be added to the stimulus bill.)
As I have mentioned in previous Grammy recaps, Obama, Bill and Hillary Clinton, and Jimmy Carter have all won Grammys for Best Spoken Word Album. Notice a pattern here?
So, it was no surprise that the Grammy for Best Spoken Word Album went to Al Gore's "An Inconvenient Truth," narrated by Beau Bridges, Cynthia Nixon, and Blair Underwood. Two years ago, I predicted it would win, although I did not anticipate that Bridges, Nixon, and Underwood would do the recording.
Robert Plant and Alison Krauss won five Grammys for Record Of The Year, Album Of The Year, Best Pop Collaboration With Vocals, Best Country Collaboration With Vocals, and Best Contemporary Folk/Americana Album. If I am not mistaken, I believe that Krauss now has a record 26 Grammys. That's awesome.
And John Mayer won a Best Male Pop Vocal Performance Grammy for "Say." If you have never heard the song, let me sum it up for you. He repeats the line "Say what you need to say" 40 freakin' times.
Speaking of classic lyrics, the Best Rock Performance By A Duo Or Group With Vocals Grammy went to Kings of Leon for "Sex on Fire." Who can forget that classic chorus "You, your sex is on fire/Consumed with what's to transpire"?
Finally, one of the greatest music videos ever conceived, Weezer's "Pork and Beans," won the Grammy for Best Short Form Music Video. Watch it here. Linkable Entry
For an opposing view …Posted by Mitch Kokai at 06:43 AM … that eschews the silly reliance on outdated Keynesian ideas, consider the free-market principles that helped entrepreneur Robert Luddy build CaptiveAire Systems into the nation’s largest manufacturer of commercial kitchen ventilation systems.
Click play below to hear Luddy’s presentation to fellows and candidates for the E.A. Morris Fellowship For Emerging Leaders.
Linkable Entry
Like a bad penny …Posted by Mitch Kokai at 06:42 AM … the ideas of John Maynard Keynes and acolytes such as John Kenneth Galbraith return to the center of public policy debate. Galbraith’s son James is leading the charge, as Fortune tells us:
The conventional wisdom about economics is up for grabs right now. We're not speaking here of the conventional wisdom in the economics profession - that moves pretty slowly, and is anyway less wedded to a caricature of infallibly rational markets than most people think. We mean the assumptions that lawmakers, businesspeople, journalists, and educated voters use when they talk about economic problems. Ideas that had been banished to the dustbin are suddenly back on the table, and last year's gadflies now seem as if they were ahead of the curve. Exhibit A: James K. Galbraith, go-to economist of Nation magazine-style liberalism, unabashed market skeptic, and rock-ribbed Keynesian since before Keynesianism was cool (again).
"Events have moved me to the center - I have not moved," says Galbraith, sipping coffee in his University of Texas office, which overlooks the presidential library of Lyndon B. Johnson, architect of the Great Society. It's December, and Galbraith has just returned from Washington, D.C., where he was one of five economists speaking in a closed-door session for House Democrats. In step with a former John McCain campaign advisor and a Clinton administration economist, he argued for a very, very big stimulus package.
To get a sense of what’s wrong with Galbraith’s arguments, click here, here, or here. Linkable Entry
Don’t call this capitalismPosted by Mitch Kokai at 06:40 AM Some voices on the Left contend that the current flood of government intervention in the economy serves as a corrective after years of unfettered capitalism.
Those who buy into this argument should consider the following passage from a Fortune article on Bank of America’s woes:
On Wednesday, Dec. 17, [BofA’s Ken Lewis] flew to Washington to discuss his options. At 6 p.m., he sat down with Fed chairman Ben Bernanke and Treasury Secretary Hank Paulson in the cathedral-like Federal Reserve building, renowned for its echoing vastness. Lewis told Bernanke and Paulson that because Merrill's losses were so much worse than expected, BofA was in a position to invoke a "material adverse effect" clause from the merger contract to cancel the deal.
Bernanke and Paulson weren't swayed. They told Lewis that the Fed's legal staff had read the contract, and that under the law, BofA absolutely had to close the deal. They also said that a failure to buy Merrill would put the entire banking system at risk. They made it clear that renegotiating the price - a natural move in normal times - was not an option. The reason: It would take two months to issue new proxy statements and hold shareholder votes at both companies, while the fate of Merrill stayed in limbo. Bernanke and Paulson said they would provide a rescue package for BofA to ensure that it had adequate capital to complete the deal.
Technically the government did not have the authority to force Lewis to buy Merrill. But it hardly matters: In the current crisis bankers have little alternative but to do what Washington tells them. "The Fed and Treasury made it crystal clear," says one person familiar with the talks. "Our position is your position."
I wonder what Chet Arthur would have thought of such heavy-handed government intervention in the banking sector. Linkable Entry
Business Week’s editor appears to have revisited bailout maniaPosted by Mitch Kokai at 06:38 AM In his latest editor’s memo, Stephen J. Adler writes:
Davos can deliver insights it doesn't necessarily intend. The key messages that seemed to flow from four days of speeches, panels, "bilaterals" (i.e., chatting with someone), cocktail parties, and press briefings were these:
1. Everyone stupidly failed to see the financial calamity coming except roughly four economists who now must be heeded in everything they say and all they predict.
2. The private sector has ruined the global economy and can no longer be trusted.
3. Government is ascendant, with regulation closest to godliness.
4. These conclusions are correct and will stand the test of time.
What I took away instead was this: Beware conventional wisdom and groupthink. Be skeptical of tidy explanations for complex past events. Be even more skeptical of confident predictions of future human behavior. Don't fight the last war.
Adler appears to have avoided the most harmful symptoms of bailout mania. Linkable Entry
Today's Carolina Journal Online featuresPosted by Mitch Kokai at 06:32 AM The week's first Carolina Journal Online exclusive features Daren Bakst's new question-and-answer guide for forced annnexation in North Carolina.
John Hood's Daily Journal makes the case for educational reforms that won't stress the state budget during trying economic times. Linkable Entry
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