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January 30, 2009

Stimulus for Meth Addicts

OK, near as I can detect, there are basically three camps on the theory of using stimulus (that is, increased deficit spending) to trigger economic recovery.

1. Do basically nothing, and let the markets re-correct through the liquidation process.

2. Cut taxes to reinvigorate risk takers, who will create economic growth and jobs.

3. Spend like crazy -- perhaps even irresponsibly -- to unleash the animal spirits.

Let's stipulate that #3 is insane. 1 and 2 are attractive, but they have practical challenges.

Peter Schiff claims that the liquidation process has to proceed unimpeded because the "incompetent," as he says, need to be weeded out. There's a lot of truth in that, but I have a hard time characterizing what's happened this last year economically on the incompetent business managers. Rather, my take is that government policies so distorted the economy that there are a lot of essentially innocent bystanders.

The Rs mostly seem to emphasize tax cuts. Problem with that is they are so weak now, and they continue to use trickle down rhetoric, that it's hard to take them seriously.

This situation cries out for bottom-up tax cutting. Best idea I've heard is a FICA tax holiday. If that were the core, it could be layered with investment tax credits, equipping government buildings with solar panels, unemployment extensions, and perhaps loans to state's teetering on bankruptcy.

Not perfect, but more likely to get things moving and satisfy certain agendas.

Also not going to happen, but one can dream.

-RC

Posted by RobertCapozzi at 06:32 AM | Comments (6)

January 29, 2009

I guess this'd be "progress"

One of the Republican congressmen who sat down with Obama this week reports that the president said the reason the New Deal didn't work was it wasn't BIG enough.

Interesting. While I can't say I agree that stimulus has to be massive to jump start the economy, I consider it a small victory that at least some progressives are FINALLY recognizing that the New Deal didn't work. The numbers are just too obvious to conclude otherwise, yet, for decades, progressives believed the New Deal worked.

-RC

Posted by RobertCapozzi at 06:40 AM | Comments (1)

January 28, 2009

Confusingly Hypocritical Times

Is it just me, or is the Beltway Dance just getting too much to watch?

The Rs are saying most of the Ds stimulus won't work to stimulate because it doesn't take effect for years, right?

Yet the Ds didn't want to increase domestic oil drilling because IT wouldn't take effect for years on the price of oil, right?

The prospect of new oil supplies, the Rs said, will change expectations on the oil market.

The prospect of stimulus will change expectations in the overall economy, say the Ds.

Could it be that both are correct and incorrect? Expectations DO change incentives and behavior. But new oil won't change current supplies.

Can the economy be stimulated? Maybe yes, maybe no, in the short run. If everyone's bummed, they're unlikely to produce and consume, that's for sure. Getting them UNbummed's a tricky thing.

Hypocrisy doesn't do it for me.

-RC

Posted by RobertCapozzi at 09:44 PM | Comments (0)

January 23, 2009

Paul Jacob is Free at Last!

Finally admitting defeat, Oklahoma Attorney General Drew Edmondson has dropped charges against our friend Paul Jacob:

"The statute under which these defendants were charged has been declared unconstitutional, and the appellate process is complete," Edmondson said. "The statute is no longer enforceable."

Of course, such language hides the fact that even if the law was not declared unconstitutional, it is a petty, politically-motivated prosecution by Edmondson. And as the attorney general seeks higher office, the voters of Oklahoma should remember this prosecutorial effort that needlessly put good people through the ringer and also wasted time and money that could be spent going after real criminals.

Way to go Paul Jacob for standing tall against injustice. Shame on Drew Edmondson.

/KDR

Posted by KevinRollins at 02:27 PM | Comments (0)

January 21, 2009

The End of Ideology

In the past week or so, pundits seem to frequently repeat a recurring theme: Obama represents the "end of ideology." I'm not sure what they mean by that, so I'll speculate.

To end "ideology" seems to be a fool's errand. People have ideas that we might call "thought systems" that each uses to measure, analyze, and assess the pageant we call life and its happenings. From the smallest aspect of our personal life, like what we're going to eat for lunch, to the largest cosmic questions of existence and meaning, it seems inescapable that the human condition is one of ideology.

During his inaugural address, President Obama touched on a different ideology that he intends, at least, to execute his office's responsibilities. He said:

"The question we ask today is not whether our government is too big or too small, but whether it works -- whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified."

What I suggest the pundits really mean is an end to "confrontational and dogmatic moralism." That is, most of human history could fairly be characterized by individuals and their like-minded kindred spirits cohere into camps who believe that X is absolutely correct and that those who disagree are wrong, even evil. It is, in a sense, a model for perpetual war, first of ideas but all-too-often of bloodshed and violence.

Those invested in maintaining that tradition bristle at Obama's call for pragmatism, for what works. I don't. Indeed, I embrace it. For, while ending ideology is foolish, expecting others to give up their ideology is even more foolish.

This is not to say that I believe much of what Obama proposes will work. Hardly, in fact. What he has trotted out so far sounds contraindicated, dysfunctional and even counterproductive. I have been impressed that, so far, he's not resorted to proclaiming that his is the right and only, but rather his best judgment in this time and place.

I do get the sense that Obama understands the difference between "mediation" and "compromise." In mediation, two or more parties are brought together where they articulate their views and the mediator works to craft a solution that most can at least live with. In compromise, parties are asked to "give up" their values for a solution that, more often than not, no one is pleased with. Mediation works to find the transpartisan ground, sometimes creating synthesized solutions not imaged by any party. Compromise takes one from Column A and one from Column B and puts them on the same plate, even if they do not work together.

Mediation is slower and much harder work. When it does work, however, great things can happen.

Are we entering a new age of mediation over conflict and compromise? Perhaps. But we should remember that old habits do indeed die hard.

-RC

Posted by RobertCapozzi at 06:53 AM | Comments (0)

January 19, 2009

Hail to the Transpartisan Chief

"What I hope to model is a way of interacting with people who aren't like you and don't agree with you that changes the temper of our politics," Obama was quoted as saying.

-- Allen, JoAnne, "Obama sees his race as an opportunity", Reuters, January 19, 2009.

And if Obama needs any help working on his "model", he can consult these new transpartisan resources:

My new blog: Transpartisan.com
Transpartisan Alliance: Transpartisan.net

/KDR

Posted by KevinRollins at 01:12 PM | Comments (0)

Free Liberals Find Victory in Hesse

From the Independent:

Mrs Merkel’s conservative Christian Democrats (CDU) headed by Hesse’s right wing Prime Minister, Roland Koch won over 37 percent of the vote in the state and pledged to form a coalition with the Free Democrats who won a record 16 percent of the vote – the party’s best showing since the 1954.

From the FDP website:

The Free Democratic Party (FDP) is Germany´s centrist liberal party stressing fiscal responsibility, cultural tolerance, and market economy. With its belief in more freedom for more citizens, the FDP firmly holds that economic freedom and personal freedom are closely connected. The German liberals fight for a dynamic, creative, open, and prosperous society. The kind of freedom the FDP cherishes is not freedom from responsibilities but the freedom to engage in a responsible conduct for one´s own life and for the lifes of those around us.

/KDR

Posted by KevinRollins at 11:37 AM | Comments (1)

Our Farcical Future

A funny, if heavy-handed and partisan, video of our not-too-distant future:

Posted by RobertCapozzi at 07:21 AM | Comments (0)

January 18, 2009

A Quick and Easy Global Warming Solution

Barack Obama has been talking about billions of stimulus dollars towards alternative energy. This may be way than necessary. Watch this video on a nearly forgotten technology from a half century ago. All we need to do is bring this old technology up to 21st century standards and we can shut down our coal fired power plants.

Posted by CarlMilsted at 07:11 PM | Comments (0)

January 14, 2009

Are We Living Atlas Shrugged?

Depressing as it may seem, at least for those who are familiar with the book, as Stephen Moore of the Wall Street Journal points out in this interesting article, we seem to be living in the world of "Atlas Shrugged." After all, government is standing the way of success and subsidizing failure like never before and if Obama lives up (or down) to expectations, things will get a whole lot worse in the years ahead.

Fortunately, I think the American people are beginning to realize what is happening and what has happened under the Bush Administration, but we will be in for some tough battles ahead.

Posted by PaulGessing at 12:39 PM | Comments (3)

January 09, 2009

Sleeping on Knowledge

Dave Bieler sends a picture of Howie, peaceably unaware of the knowledge he sleeps on.

howie calculus of consent.png

Sort of like Obama talking about big government solutions at George Mason University.

/KDR

Posted by KevinRollins at 09:11 AM | Comments (1)

January 08, 2009

Midnight Bombing, Midnight Regulations

Jon Stewart reports (2:23 min into the video) on Israel getting its bombing of Gaza in before the end of the Bush Administration (h/t Paul Gessing).

This "midnight bombing" is similar to the "midnight regulations" phenomenon, where regulatory agencies rush to get their regulations put into practice before the end of a presidential terms.

Jerry Brito and Veronique de Rugy at Mercatus Center have found that this is a recurrent issue at the end of each presidential cycle:

...at the end of a term, the president has not only the ability, but an incentive to use these resources to try to push through policy changes. Howell and Mayer explain that midnight regulation occurs when "political uncertainty shifts to political certitude." During the last 100 days of his administration, a president knows exactly who will succeed him, as well as the new president's policy positions, legislative priorities, and the level of partisan support the new president will enjoy with the new Congress. The sitting president has every incentive to promulgate last-minute rules and regulations to deftly extend his influence beyond the day he leaves office. (p. 4)

Once a rule has been established it is hard to get it removed, says Brito and de Rugy's report (p. 6). These rules may be worse than average because of the lack of accountability of the outgoing leadership (p. 7-8) and the reduced review (a rush to regulation means less review by the OIRA, part of the Office and Management and Budget, p.13).

Several solutions are available, according to the Mercatus report, including making it easier to remove the midnight regulations, setting dollar-amount regulatory caps per agency (a "budget" so to speak), or limiting the total number of regulations that are put up for review (p.18-19).

Coming back to the issue of midnight bombing, or midnight baby-fighting rings, as Stewart facetiously suggests, and considering the pivotal role the US government plays internationally, I'm led to wonder why so many bad acts/actors wish to express themselves in the period of no consequences. Has the US government taken too much responsibility for the conduct of the world (and the trivial back home)? Does this overweening authority cause folks to want to act out like incorrigible teenagers? Alternatively, do such openings provide the mechanism for normal political steam-letting in any system of authority?

/KDR

Posted by KevinRollins at 11:48 AM | Comments (0)

Do Potheads Promote Pot Smoking?

As the publisher of this site, I get a lot of email from other sites seeking either link trades or attention. Today I got this message from the pot-growing site, rollitup.org:

As I was surfing around msn , I discovered your website: http://www.freeliberal.com I am trying to add as many informative websites as possible to my site. Which in turn will benefit my users as well as provide you with relevant traffic to your site. I have a website with about 5,000 - 7,000 people on it per day who fit the same demographic as your site.

Mostly, I ignore such messages, because I see Free Liberal as operating at a higher plane than just getting high.

But, I'm left with this conundrum: A society that was more willing to get high (and less drunk or stressed) would probably be more peaceful and beautiful. Potheads aren't usually purveyors of coercion! But, can potheads actually create/sustain such a free liberal society? Some potheads are productive, especially those whose minds are already full of interesting learning, but many potheads, especially teenagers just distract themselves into foolishness. To me, it seems that it will probably be the sober, religious, natural rights crowd that will fervently shout: "Stop the madness, free the potheads, foolish though they may be!"

/KDR

Posted by KevinRollins at 11:21 AM | Comments (3)

January 07, 2009

Search Me?

CNN passes on a local story about two San Francisco 49 fans who are suing the NFL over pat down searches prior to entering the ball park. The NFL maintains that no one is forced to go to a Niners game (given there record of late, I would not be so sure), so that any requirement is legal. The season ticket holders disagree, claiming the searches are an unreasonable invasion. Note that the pat downs are conducted privately, which makes you wonder if it is the war on terror or the war on Jack Daniels and do it yourself concessions that is the real enemy.

Interesting dichotomy - a libertarian individual right vs. a libertarian commercial right.

I think the answer depends on who owns the stadium. If the event is being held at a public venue, then the NFL has no business searching citizens, since they are using the space at the sufferance of the community (especially the way they play). The community should put its foot down and direct its elected leaders to stop the searches. If the team paid for the stadium - and without the usual corporate welfare associated with such ventures - it can dictate terms, otherwise it must be made to respect the rights of the masses to smuggle in Evian,

Posted by MichaelBindner at 09:44 PM | Comments (0)

The Gaza Strip

In case you might have been so foolish to think that 2009 might have brought about a change of attitude among our leaders, especially when it comes to the Middle East, the Israeli invasion of the Gaza Strip should have dispelled those hopes. Perhaps not surprisingly, given my previous praise for Jon Stewart's "reporting," the Daily Show has had better and more balanced coverage of the conflict than the mainstream media. Check out a recent example here.

Posted by PaulGessing at 09:37 PM | Comments (1)

Just Keep Saying, "Free Paul Jacob"

Some things are so obvious, they need repeating.

The Wall Street Journal and the Arkansas Democrat-Gazette have joined the call to end the prosecution of our friend Paul Jacob for the audacity of petitioning Oklahoma's government.

It's been over a year since the legal battle began. I worry that it is hard for people to maintain enthusiasm for the cause (or rather, outrage at the government) over long periods of time. It is probably easier for me to keep up the rage, as I know Paul personally, and whenever I think of the government caging this wonderful, decent man, my blood boils.

Certainly, campaigns such as "Free Mumia" have had long runs, and the abortion battle rages on. As time passes, one wonders if the battle lines just become more hardened, or if there are no more people to be recruited to join the fight. But if bitter diehards we must be, then so be it.

Anyone who sees the injustice of this, should think and act creatively RIGHT NOW, because it will be much better to keep Paul Jacob out of prison than to have to fight for his release if somehow the Supreme Court overturns the 10th Circuit's dismissal of the case. Oklahomans who find reprehensible this behavior of their Attorney General, must do everything they can to sabotage his campaign and bring his political career to a total and final end.

For those of us who are angered, but can't think of a new way of saying something we firmly believe in, just keep saying, "Free Paul Jacob."

/KDR

Posted by KevinRollins at 11:03 AM | Comments (6)

The Incredible Shrinking Taxpayer Class

Yesterday I listened Laura Ingraham and Pat Buchanan bemoan the tax cutting plans that Obama is suggesting.

Their concern was that the percentage of actual taxpayers would decline under the Obama trial balloon. I'm not sure they were accounting for ALL taxes, or just income taxes, although it sounded like the latter. They seemed to make a public choice argument, that if the percentage of non-taxpayers rose, there would be fewer to resist tax and spending increases.

That seems to be a valid point. On the other hand, most government spending is not for the less well off. And even the spending that targets the less well of was generally agitated for by the more well off. It seems to me that the less well off are too busy surviving to be agitating. The well off -- especially seniors -- have the time and resources to slam through things like prescription drug benefits for seniors. They have gobs of time and resources to concoct crazy geopolitical narratives about meeting jihadist enemies in Baghdad before they sail into the port of Baltimore.

Plus, I'm not sure that if the bottom two deciles of taxpayers get off the hook that that leads to increased government necessarily. It could embolden the next decile up to demand their taxes be reduced, too.

-RC

Posted by RobertCapozzi at 06:38 AM | Comments (1)

January 03, 2009

Bailout options

Whether the current bailout works or not, the Alt-A mortgage bubble will force the need for a new one. We need to be careful that we do not simply repeat the mistakes which set this one in motion by having too low interest rates leading to a reinflation of the housing bubble.

There are five reasonable options here. The first is liquidation - providing a means through bankruptcy or some other systematic default mechanism to allow people to get out of debt that does not work.

The second option is to end tht toxic practice of allowing people to get home equity loans to "cash out" equity for vacations and the payment of credit card balances - since this simply leads to more debting. Ending the deductibility of these interest payments would take care of this nicely, possibly as a part of comprehensive tax reform.

A third provision is to create government progams for borrowers to refinance their Alt-A morgages at lower fixed rates through their state housing finance agencies. This could be done either with or without adjustment of the principal balance. If the principal balance is adjusted, however, the government needs to reach back and capture through taxation some of the extreme capital gains people made in when the housing bubble was growing. For some, this would be a wash, since they sunk their gains into a new property which is now worth less then the purchase price - however other sellers got out and stayed out - although many of these probably lost money by investing in the toxic paper that resulted from these very transactions. If we bail them out for these investments, it must be net of their undo capital gains. This is why a government bailout is necessary, as the private sector has no place making such distinctions.

The fourth and most important piece of any bailout should be higher incomes. If incomes catch up to housing values, much of the problem goes away and housing prices can stabilize and debt will be repaid. Calls for governmental budget cuts, teacher furloughs, lower union wages need to be resisted - since they will exacerbate the problem. If anything, people should be getting raises and the minimum wage increased. For any who are displaced in the private sector, massive education funds with stipends should be made available when people are operating at a human capital deficit.

The fifth point is to increase the top tax rates, not at $250,000 but at $150,000, to at least Clintonian levels - as well as restoring the capital gains and investment rates to those levels as well. This will put more money in the consumption and government sector and take it out of the chase for overpriced investment instruments. Stock prices and real estate values were bid up because the wealthy and upper middle class had more money then the productive sector had investment opportunities - so toxic investment opportunities were created and unrealistic profit goals were required to compete. Take away the fuel for the fire and all will settle down.

Posted by MichaelBindner at 11:00 AM | Comments (2)

January 01, 2009

Tu ne cede malis sed contra audentior ito

Apparently this was the motto of Ludwig von Mises. It translates in something like: "Do not give in to evil but proceed ever more boldly against it."

Interesting counsel. For me, it sounds like a prescription for a very unhappy life, and an ineffective one.

Of course, it's premised on a notion of "evil." Where evil starts and ends are highly subjective. Is the driver who cuts us off "evil," or just careless? Is the killer a murderer, acting in self defense, or temporarily insane? Is the man who takes a loaf of bread a thief, or just hungry?

It's quite easy to be "bold" in response to "evil." Perhaps that means that we should pass the careless driver and cut him or her off, too. Kill the killer. Take off the hand of the thief. Exact rough justice at each and every "evil."

No, that doesn't comport with a civil society and a rule of law. Civil society – and civilized people – recognize that judgment should be suspended to await justice. It requires patience, not boldness.

Rashness and sanctimony lead to Salem witch trials.
-RC

Posted by RobertCapozzi at 06:00 AM | Comments (4)

Free-for-all (frfr-ôl) -- n. A disorderly fight, argument, or competition in which everyone present participates.

from Dictionary.com



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