Is that what TARP is? Looks like it to me. Of course, government can do lots of things that you and I would go to jail for (including the way they keep their books). But this looks even worse, and an actual violation of the law.
It’s easy to guess that Barofsky is looking into the possibility that Treasury Secretary Henry Paulson coerced the CEOs of the nine largest banks to accept capital investments from TARP, even though several of them didn’t want the government as a stakeholder. Wells Fargo chairman Richard Kovacevich, for example, says that he was “forced to take the TARP money.” Philip Swagel, who served at the time as assistant secretary for economic policy at the Treasury, admits that “there is no authority in the United States to force a private institution to accept government capital. This is a hard legal constraint.”
Is that the “public corruption” Barofsky is talking about?
But then again, the Emergency Economic Stabilization Act, the statute that authorizes TARP, doesn’t give the Treasury the power to make direct investments in banks at all. It gives the Treasury the power to buy troubled assets and to write insurance against losses in troubled assets. But there’s not one single solitary word in the act that authorizes the Treasury to buy stock in banks.
And there’s not one single solitary word in the act that authorizes the Treasury to do anything at all for auto companies like General Motors and Chrysler. The act only authorizes helping “financial institutions.” Yet billions of TARP dollars have gone to the two automakers.
I think these people have simply gone mad with power. Acton had it right.
From Jon Goff. Sometimes it’s necessary to point out the obvious — for a one-way delivery, reusability can be a bug, but for round trips, it’s a feature.
The supply chain is simply empty, all the way up to the people who mine the raw materials. It’s going to take time to replace all the links in that chain, and it’s not because of the war in Iraq/Afghanistan, The Joos, FEMA, the CIA, a secret agreement to implement gun control through ammo availability, or any other silly theory you may have heard. This is a textbook example of what happens when an inelastic supply chain, composed with scarce “just in time” inventories, meets insatiable demand. It’s not sexy or intriguing, but that’s the way it is.
You know what’s scarier? Your food comes to you the same way. Imagine what would happen if…
And we were thinking about going shooting this weekend.
By all means conservatives should object to the regulatory nightmare that the control of greenhouse gas emissions under the Clean Air Act will create. But this is a result of the Supreme Court’s reinterpretation of the Clean Air Act in Massachusetts v. EPA and the failure of Congress to amend the law or enact an alternative, not the Obama Administration.
The yield curve predicts growth. Check. Consumer sentiment is ticking up. Check. But CEO confidence is lousy, and CEOs are (not) spending accordingly. Whoops. This begs the question: Why are CEOs in such a low mood?
Answer: If you are a CEO in financial services, manufacturing, energy production and health care, you are going to be more regulated. Period, end of story. Your response to forthcoming regulation of yet-to-be-determined complexity will be to hunker down. Keep your name out of the news, improve the balance sheet and hold tight.
This is why the U.S. economy, which wants to turn the corner, is still stuck in the intersection as it decides which way to go.
In her book The Forgotten Man, Amity Shlaes (now a Forbes columnist) wrote that the 1937-38 “depression within a depression” occurred when “capital went on strike.” President Roosevelt’s willingness to “try anything”–including retroactive taxation, laws against discount pricing and an attempted Supreme Court packing–had businesses and their backers so confused about Roosevelt’s rules that they simply withdrew.
This is the risk of Obama’s willingness to “do what it takes.” The words sound positive and action-oriented. But in practice, “do what it takes” really means “anything can happen.” Tearing up of legal contracts … that can happen. Limits to salary and travel … that can happen. Bullying by the Environmental Protection Agency … that can happen. Nationalization of General Motors and Citigroup … that can happen. Nobody knows for sure. Government is sorting it out, day by day.
I’d be happy to triple Congressional salaries, if they wouldn’t come in to “work.”
One of the few things that I liked about the Clinton administration was its support for free trade. So it’s nice to see the Obama administration get this right as well, despite a lot of idiotic protectionist rhetoric during the campaign:
The media made much of Obama’s polite gestures to dictators, but he gave them nothing resembling what he gave to Uribe. Name one dictator Obama sat with for lunch. Which troublemaker got a White House invitation? Which tinhorn got a promise to visit?
And has anyone heard of Obama giving his autograph — “with admiration!” — to another president? It was as if Obama himself unclenched his own fist to reach out to the Colombian hand.
Obama may have had political reasons to seek out Colombia — the Chavez-Obama pictures didn’t do him any good domestically, and Drudge Report ran pictures of them all weekend, infuriating White House officials.
But the outlook for free trade has been improving for several weeks, too. On a visit to Medellin last month, Uribe gave us a veiled signal of positive moves on trade under the surface, and U.S. Trade Representative Ron Kirk has since made encouraging statements.
Two congressional delegations of pro-trade Democrats turned up in Colombia this month, back-slapping with the Colombians. But nothing approaches the good news seen now.
One of the causes of the Great Depression was protectionism and the imposition of tariffs. I hope that we’ll at least avoid that policy insanity.
Tyler Cowen has a brutal review of what looks to be an idiotic ant-capitalist documentary:
A few months ago I went back and tried to read some Ayn Rand. As Adam Wolfson has suggested recently in these pages, it wasn’t easy.1 I was put off by her lack of intellectual generosity. I read her claim that “collectivist savages” are too “concrete-bound” to realize that wealth must be produced. I read her polemic against the fools who focus on redistributing wealth rather than creating it. I read the claim that Western intellectuals are betraying the very heritage of their tradition because they refuse to think and to use their minds. I read that the very foundations of civilization are under threat. That’s pretty bracing stuff.
I can only report that The End of Poverty, narrated throughout by Martin Sheen, puts Ayn Rand back on the map as an accurate and indeed insightful cultural commentator. If you were to take the most overdone and most caricatured cocktail-party scenes from Atlas Shrugged, if you were to put the content of Rand’s “whiners” on the screen, mixed in with at least halfway competent production values, you would get something resembling The End of Poverty. If you ever thought that Rand’s nemeses were pure caricature, this film will show you that they are not (if the stalking presence of Naomi Klein has not already done so). If you are looking to benchmark this judgment, consider this: I would not say anything similar even about the movies of Michael Moore.
In this movie, the causes of poverty are oppression and oppression alone. There is no recognition that poverty is the natural or default state of mankind and that a special set of conditions must come together for wealth to be produced. There is no discussion of what this formula for wealth might be. There is no recognition that the wealth of the West lies upon any foundations other than those of theft, exploitation and the oppression of literal or virtual colonies.
“Narrated by Martin Sheen” would be the first clue.
Since EPA plans to find endangerment on both health and welfare grounds, the Agency could be compelled to establish “primary” (health-based) NAAQS for GHGs. Logically, the standard would be set below current atmospheric levels. Even very stringent emission limitations applied worldwide over a century would likely be insufficient to lower GHG concentrations. Yet the CAA requires EPA to ensure attainment of primary NAAQS within five or at most 10 years—and it forbids EPA to take costs into account. Regulate CO2 under the NAAQS program and there is, in principle, no economic hardship that could not be imposed on the American people.
It’s the new hair shirt in the new environmental religion. And all from unelected bureaucrats.