Category Archives: Business

Business, Economics, Political Commentary

The EU

14 Comments

…on its last legs:

If Bernanke tries to bail out the Eurocrats by printing money, expect a revolt that made previous Tea Party rallies look like Sunday picnics.

[Update a few minutes later]

Don’t even think about it:

In the days leading up to the collapse of Lehman Brothers, then French Finance Minister (now IMF Managing Director) Chistine Lagarde told then-Treasury Secretary Hank Paulson that he could not allow Lehman to fail. The ramifications would be catastrophic, she said. She was mostly right.

Three years later, it will be Angela Merkel talking to President Obama,Treasury Secretary Geithner and Federal Reserve Bank Chairman Ben Bernanke with exactly the same message. The United States government and the Federal Reserve must come to the rescue of the Eurozone or the ramifications will be catastrophic. And she will say that she needs roughly $1 trillion in financial guarantees and liquidity support. That’s the number that will calm the markets.

She will do this publicly (it will be leaked to the FT or the NYT) because (a) she wants to maximize the pressure on the US to ride to the rescue and (b) she wants the blame to fall elsewhere in the event that the “situation” goes haywire.

And there will follow perhaps the defining moment of the Obama Presidency. If Obama goes forward and provides all or part of the $1 trillion guarantee, he will likely cut his own political throat in so doing. If Obama declines to go forward and provide all or part of the $1 trillion guarantee, he will likely preside over the second massively destabilizing financial panic in four years, thus insuring a second Great Recession, thus cutting his own political throat.

It’s not like he has the unilateral power to do it anyway. Bernanke is nominally independent (particularly since he just got reappointed) and there’s no way he’d get it through Congress. I wonder if Merkel doesn’t understand what powers an American president does and doesn’t have?

Business, Political Commentary, Social Commentary

Affirmative Action

7 Comments

…and its immorality. People who advocate it are the true racists. As Glenn says, it’s all about exploiting ignorance, and the difference between that which is seen, and that which is unseen. Of course, as a commenter notes, the most devastating impact on the nation of affirmative action to date is that it put a mediocrity in the White House.

[Update a while later]

Debates and racial preferences.

Business, Economics, Political Commentary, Space

SLS Thoughts

9 Comments

…from the Space Access Society:

NASA HQ just gave in to prolonged Congressional pressure and announced a vehicle configuration for the SLS “Senate Launch System” heavy-lift launch vehicle project. The project will be run under traditional NASA practices; the cost multiplier over doing the job commercially will thus presumably start out on the rough order of fifteen times as expensive.

Note we said, start out. We see indications that the NASA organizational dysfunction that causes that huge cost multiplier is not a constant, but rather has been growing in recent years. We thoroughly expect that SLS project cost will grow and schedule stretch, just as Constellation program costs and schedule did.

We predict that at some point, it will be as obvious that SLS will never fly usefully as it was obvious that Constellation was going nowhere, and SLS too will be expensively cancelled. We hope that SLS will go away before it’s wasted even more scarce dollars (and impacted even more actual useful NASA projects) than Constellation – but we wouldn’t bet on it at this point.

The only hope is that people in Congress who don’t normally pay attention to space will start to notice, given the fiscal issues that the nation faces.

And on CCDev:

Human spaceflight will remain a risky business for a long time no matter who is in charge, the industry and FAA, or NASA. The only way it will become completely safe in our lifetimes is if it is made so expensive that we no longer do it at all. NASA getting their way on changing how CCDev is run may ultimately produce exactly that result.

Indeed.

Business, Economics, Political Commentary

Our “Federal Family”

5 Comments

…is floundering:

It is a wonder, this faith-based (and often campus-based) conviction that the government that brought us the ethanol program can be trusted to precisely execute wise policies that will render the world predictable and progressive.

For two years, there has been one constant: As events have refuted the Obama administration’s certitudes, the administration has retained its insufferable knowingness. It knew that the stimulus would hold unemployment below 8 percent. Oops. Unemployment has been at least 9 percent in 26 of the 30 months since the stimulus was passed. Michael Boskin of Stanford says that, even if one charitably accepts the administration’s self-serving estimate of jobs “created or saved” by the stimulus, each job cost $280,000 — five times America’s median pay.

And research by Garett Jones and Daniel M. Rothschild of George Mason University’s Mercatus Center indicates that just 42.1 percent of workers hired by entities receiving stimulus funds were unemployed at the time. More (47.3 percent) were poached from other organizations, and 10.6 percent came directly from school or outside the labor force.

Obama’s administration, which is largely innocent of business experience, knew its experts would be wizards at investing taxpayers’ dollars. Oops.

“Floundering” is too kind a word, I think. Can I be emancipated from this “family,” please?

Business, Economics, Media Criticism, Political Commentary

Solyndra

7 Comments

Some interesting notes from yesterday’s hearings:

Rep. Brian Bilbray (R., Calif.) had perhaps the most compelling questions for the witnesses (even though they ducked and dodged them all). For instance, why on earth did the administration approve a $535 million loan guarantee for to fund the construction of a new manufacturing facility in California — a state with significant financial problems, 12 percent unemployment, an abundant supply of empty warehouses (a result of businesses “fleeing” the state, Bilbray said), and some of the strictest regulations and permitting requirements in the country?

This was just “absurd,” he said, and raises questions about the competence of the agencies who ultimately approved the loan. Bilbray outlined the litany of permits and regulations a new facility in California would have to comply with, especially since the building site was located on “virgin farm land” and fell within a “non-attainment” zone as classified by the EPA. Because the resulting costs would be quite high, why build a whole new facility, as opposed to renting or retrofitting an existing facility? Or open a new plant in another state? Bilbray asked. Fair questions, but neither witness claimed to know anything about that aspect of the loan decision.

The country’s in the very best of hands.

“Fast and Furious” is this administration’s Watergate, except it’s much worse. Solyndra is this administration’s Enron, except it’s much worse. But they won’t be treated that way by most of the press.

[Update a few minutes later]

Actually, I should give props to ABC, who has been covering Solyndra pretty aggressively. They are reporting that Treasury is opening up an investigation. I wonder how sincere it will be? I would think that Geithner would like to avoid being the fall guy here.

[Update early afternoon]

Maybe Chu will be the fall guy. I wouldn’t miss him. Of course, there’s almost no one in this administration that I would miss, unless I thought they’d be replaced by someone worse. But I think it’s going to be a lot harder for the president to get his leftist nominees through now than it was in early 2009.

[Late afternoon update]

“Questions will be asked.”

What fools these people are.

Business, Economics, Political Commentary

The Fake War

1 Comment

…on unemployment. Even Robert Reich thinks the president isn’t serious:

Reich is still confused, though:

If the president was never really serious about getting Republican votes in the first place–if his jobs bill and the tax increase on the wealthy were always going to be part of his 2012 election year pitch–why didn’t he make his jobs bill big enough to do the job?

Let’s accept for the sake of argument the creationist premise that an omniscient, omnipotent, benevolent government can create all the jobs it wants simply by borrowing and spending enough money. Let’s also assume Reich’s premise that “enough,” in this case, is some figure considerably in excess of $447 billion.

Why didn’t Obama ask for enough? That seems obvious. If the answer is “no,” and the point of asking the question is to elicit a negative response, then the practical difference between what you get if you ask for $447 billion and, say, $5 trillion is not $4.553 trillion but zero. If Obama is asking for the money only for appearance’ sake, as Reich concedes he is, then it’s more important that $447 billion appears more reasonable than $5 trillion.

Either way, Megan McArdle wishes “that Obama hadn’t wasted my Thursday evening, and that of 31 million other Americans, listening to a jobs plan that was only designed to produce one job–a second term for Barack Obama.” Most of those viewers–those of us who write about this stuff for a living being obvious exceptions–didn’t actually have to watch the speech, so we’re not able to work up much sympathy for those who didn’t have the good sense to change the channel or go out and live a little.

But let’s take this by the numbers. Obama’s speech lasted about 42 minutes. Multiply that by 31 million viewers and, say, $20 an hour, and you end up with the man-hour equivalent of about $434 million. It’s a shameful waste, but much less of one than if Stimulus Jr. actually became law.

No danger of that, fortunately. The neo-Keynesians have finally completely destroyed whatever credibility they ever had.

Business, Political Commentary, Space

Is FAA Belt Tightening Good For Commercial Spaceflight?

17 Comments

Another CEI colleague, Luke Pelican, has a blog post at Open Market about the current House proposal to halve FAA-AST’s budget request:

Given the current quagmire facing NASA, the rapid development seen in the private space sector, and the uncertainty regarding the FAA-AST’s future regulatory plans, this budgetary restriction may help narrow the agency’s focus to ensuring a streamlined licensing process for commercial operators, rather than placing greater emphasis on regulatory efforts that could hamper future commercial space developments.

If they are going to cut the office’s budget, that’s at least a strong argument for pulling back their regulatory reach. They need to include the moratorium in whatever comes out of conference.