Saturday, November 22, 2008
Thomas E Woods - Principles of 1798
Professor Woods on Thomas Jefferson, the 1st amendment, nullification, and the Virginia and Kentucky resolution of 1798.
HT: Liberty Pen
Friday, November 21, 2008
Best post I've read today on Herbert Hoover and our financial woes
Jeff Perren over at Shaving Leviathan details Herbert Hoover's actions that led to the Great Depression. Sadly, our government seems to be following his footsteps.
Banking deregulation reduces racial wage gap
A recent study by a group of Brown University academics found that one of the benefits of a deregulated banking industry is a reduced (but not eliminate) wage gap between blacks and whites. The theory is that when laws preventing banks from incorporating in other states (than they were already operating in) were eliminated, this eventually led to increased competition and it also created better access for entrepreneurs to start up businesses that would employ more people. The more people employed the more likely hood that racial bias would be reduced. The states with the highest racial wage gap before deregulation seemed to have benefited the most after deregulation. Big government advocates that want to punish the banking industry for the recent financial crisis would do well to look over this study carefully before over-reacting with regulatory schemes.
Thursday, November 20, 2008
Herbert Hoover and the New Deal
Thomas DiLorenzo, Phd. in Economics at Loyola, lectures on Herbert Hoover and the myth that free-market capitalism was the cause of the Great Depression.
HT: Liberty Pen
Tuesday, November 18, 2008
The Magnificence of Disposable Diapers
Art Carden at the Mises Institute sums up the beauty of disposable diapers. As a father of a 11 month old, I can attest to the sheer convenience and time saving traits of the modern disposable diaper. It is another example of how the environmentalists get it all wrong.
Monday, November 17, 2008
The line just gets longer, folks!
If you didn't hear the latest news on the bailout fiasco, American Express recently got the green light to become a bank holding company. Of course, this move gives one of the largest credit card companies a juicy opportunity to lobby for government funding. Well, guess what?
AmEx received approval earlier this week from the Federal Reserve to become a bank holding company, which is a similar structure to traditional commercial banks. The credit card company now has access to financing from the Fed and the ability to grow a large deposit base.
The company is said to be asking the government for an investment, according to a report in The Wall Street Journal citing unnamed sources. A spokeswoman for AmEx declined to comment, and telephone calls to the Treasury Department, which is running the $700 billion financial bailout program, did not immediately return telephone calls.
The increased funding opportunities through government programs, including the potential $3.5 billion investment, could be a huge boost to American Express as one of its primary sources of funding has nearly disappeared amid the ongoing credit crisis.
American Express relied on packaging pools of credit card debt and selling them to investors in the securitization market. As investors have shied away from purchasing all but the safest forms of debt, the market for credit card-backed securities has dwindled.
American Express is also facing a slowdown in the broader economy, which has led to more customers missing payments and cutting back on spending, hurting the company's profitability.
I can see a congo line way off in the distance of well-dressed executives making their way to Washington, D.C.
AmEx received approval earlier this week from the Federal Reserve to become a bank holding company, which is a similar structure to traditional commercial banks. The credit card company now has access to financing from the Fed and the ability to grow a large deposit base.
The company is said to be asking the government for an investment, according to a report in The Wall Street Journal citing unnamed sources. A spokeswoman for AmEx declined to comment, and telephone calls to the Treasury Department, which is running the $700 billion financial bailout program, did not immediately return telephone calls.
The increased funding opportunities through government programs, including the potential $3.5 billion investment, could be a huge boost to American Express as one of its primary sources of funding has nearly disappeared amid the ongoing credit crisis.
American Express relied on packaging pools of credit card debt and selling them to investors in the securitization market. As investors have shied away from purchasing all but the safest forms of debt, the market for credit card-backed securities has dwindled.
American Express is also facing a slowdown in the broader economy, which has led to more customers missing payments and cutting back on spending, hurting the company's profitability.
I can see a congo line way off in the distance of well-dressed executives making their way to Washington, D.C.
Why Bankruptcy Is the Best Option for GM
From the WSJ: Chapter eleven is the most practical course for General Motors and for taxpayers:
GM has about 7,000 dealers. Toyota has fewer than 1,500. Honda has about 1,000. These fewer and larger dealers are better able to advertise, stock and service the cars they sell. GM knows it needs fewer brands and dealers, but the dealers are protected from termination by state laws. This makes eliminating them and the brands they sell very expensive. It would cost GM billions of dollars and many years to reduce the number of dealers it has to a number near Toyota's.
Foreign-owned manufacturers who build cars with American workers pay wages similar to GM's. But their expenses for benefits are a fraction of GM's. GM is contractually required to support thousands of workers in the UAW's "Jobs Bank" program, which guarantees nearly full wages and benefits for workers who lose their jobs due to automation or plant closure. It supports more retirees than current workers. It owns or leases enormous amounts of property for facilities it's not using and probably will never use again, and is obliged to support revenue bonds for municipalities that issued them to build these facilities. It has other contractual obligations such as health coverage for union retirees. All of these commitments drain its cash every month. Moreover, GM supports myriad suppliers and supports a huge infrastructure of firms and localities that depend on it. Many of them have contractual claims; they all have moral claims. They all want GM to be more or less what it is.
And therein lies the problem: The cost of terminating dealers is only a fraction of what it would cost to rebuild GM to become a company sized and marketed appropriately for its market share. Contracts would have to be bought out. The company would have to shed many of its fixed obligations. Some obligations will be impossible to cut by voluntary agreement. GM will run out of cash and out of time.
It also seems that bailout fever has caught on up in Canada too: An Ontario premier has been pushing prime minister Stephen Harper to provide assistance to the province's car industry
GM has about 7,000 dealers. Toyota has fewer than 1,500. Honda has about 1,000. These fewer and larger dealers are better able to advertise, stock and service the cars they sell. GM knows it needs fewer brands and dealers, but the dealers are protected from termination by state laws. This makes eliminating them and the brands they sell very expensive. It would cost GM billions of dollars and many years to reduce the number of dealers it has to a number near Toyota's.
Foreign-owned manufacturers who build cars with American workers pay wages similar to GM's. But their expenses for benefits are a fraction of GM's. GM is contractually required to support thousands of workers in the UAW's "Jobs Bank" program, which guarantees nearly full wages and benefits for workers who lose their jobs due to automation or plant closure. It supports more retirees than current workers. It owns or leases enormous amounts of property for facilities it's not using and probably will never use again, and is obliged to support revenue bonds for municipalities that issued them to build these facilities. It has other contractual obligations such as health coverage for union retirees. All of these commitments drain its cash every month. Moreover, GM supports myriad suppliers and supports a huge infrastructure of firms and localities that depend on it. Many of them have contractual claims; they all have moral claims. They all want GM to be more or less what it is.
And therein lies the problem: The cost of terminating dealers is only a fraction of what it would cost to rebuild GM to become a company sized and marketed appropriately for its market share. Contracts would have to be bought out. The company would have to shed many of its fixed obligations. Some obligations will be impossible to cut by voluntary agreement. GM will run out of cash and out of time.
It also seems that bailout fever has caught on up in Canada too: An Ontario premier has been pushing prime minister Stephen Harper to provide assistance to the province's car industry
Sunday, November 16, 2008
Social Security Disability--Your Tax Dollars at Work
You just wait till Democrats start fattening up all of those entitlement programs they are so fond of in order to garner votes.
HT: Liberty Pen
Saturday, November 15, 2008
Compassionate conservatism hurts
I watched President Bush give this speech at the Manhattan Institute on Thursday. He praised capitalism quite a lot and it was very inspirational to some degree. Except that the size of government has ballooned greatly under his auspices as President. And the bailout frenzy is certainly an example of big government intervention and not free-markets. Lastly, I find it rather ironic and even amusing that liberals despise his economic policies yet Mr. Bush in many ways has behaved (even if you remove the costs of the Iraq war) like a liberal President--expanding the size of government.
"Compassionate"conservatism has been very expensive.
"Compassionate"conservatism has been very expensive.
Friday, November 14, 2008
GM gets on line for some of our money
There was a time when automakers wanted protection from competition and they lobbied government hard for it. This time around they seem to want to protect themselves from risk and the bad decisions that have wrought havoc to their companies. The current national and global economic crisis has created a seemingly legitimate reason for a bailout package for the automakers and also for many other corporations. But taxpayers should not be lulled into believing that a bailout for Detroit is sound policy. The federal government is largely responsible for plenty of Detroit’s ills and much of the legislation currently discussed to be tied to a bailout is politically motivated and not really based on making the companies successful. I say let them file for chapter eleven and then they can restructure their operations just like many airlines have done over the years. And the argument I keep hearing from advocates of a bailout that claim that filing chapter eleven would not work for automakers because consumers would not buy cars of a bankrupt company--this is fallacious
Thursday, November 13, 2008
Camilie Paglia on Obama's election win
No one knows whether Obama will move to the center or veer hard left. Perhaps even he doesn't know. But I have great optimism about his political instincts and deftness. He wants to be president of all the people -- if that is possible in so divided a nation. His natural impulse seems to be toward reconciliation and concord. The big question will be how patient the Democratic left wing is in demanding drastic changes in social policy, particularly dicey with a teetering economy.
In the closing weeks of the election, however, I became increasingly disturbed by the mainstream media's avoidance of forthright dealing with several controversies that had been dogging Obama -- even as every flimsy rumor about Sarah Palin was being trumpeted as if it were engraved in stone on Mount Sinai. For example, I had thought for many months that the flap over Obama's birth certificate was a tempest in a teapot. But simple questions about the certificate were never resolved to my satisfaction. Thanks to their own blathering, fanatical overkill, of course, the right-wing challenges to the birth certificate never gained traction.
...And why has Obama not made his university records or thesis work widely available? The passivity of the press toward Bush administration propaganda about weapons of mass destruction led the nation into the costly blunder of the Iraq war. We don't need another presidency that finds it all too easy to rely on evasion or stonewalling. I deeply admire Obama, but as a voter I don't like feeling gamed or played.
Read the full piece here.
In the closing weeks of the election, however, I became increasingly disturbed by the mainstream media's avoidance of forthright dealing with several controversies that had been dogging Obama -- even as every flimsy rumor about Sarah Palin was being trumpeted as if it were engraved in stone on Mount Sinai. For example, I had thought for many months that the flap over Obama's birth certificate was a tempest in a teapot. But simple questions about the certificate were never resolved to my satisfaction. Thanks to their own blathering, fanatical overkill, of course, the right-wing challenges to the birth certificate never gained traction.
...And why has Obama not made his university records or thesis work widely available? The passivity of the press toward Bush administration propaganda about weapons of mass destruction led the nation into the costly blunder of the Iraq war. We don't need another presidency that finds it all too easy to rely on evasion or stonewalling. I deeply admire Obama, but as a voter I don't like feeling gamed or played.
Read the full piece here.
Wednesday, November 12, 2008
Thomas Sowell - The Vision of the Anointed
Thomas Sowell on elitists in the media, politics, academia and affirmative action.
HT: Liberty Pen
Less bang for your buck
Food companies have found a way to keep prices low --trimming packages or making containers smaller. Do you feel decieved?
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