Did the former vice president lie to Congress? Wouldn’t shock me. Unfortunately, as noted, he wasn’t under oath.
Category Archives: Economics
A “Criminal Enterprise”
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.
MADDness
Radley Balko has more thoughts on Obama’s disastrous choice for heading the NHTSA.
Space Transport Market Thoughts
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 Down Side Of Supply Chain Management
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.
[Via Mark Danziger]
[Update mid morning]
Here’s a fact sheet on the ammo shortage.
Solar System Day
Regular readers know that I hate the earth and the environment.
Well, not really, but I’d imagine that some of the more deluded among them believe that. And I am opposed to many so-called environmentalists. But it’s not an anti-environment position so much as an anti-anti-humanity and anti-anti-free market position.
So I do have trouble getting into Earth Day. I find the notion far too blinkered and unimaginative.
Yes, earth is special and, as we learned over forty years ago (shortly before the first Earth Day), looks like a very precious and fragile jewel against the black background of an unimaginably vast, sterile and hostile universe.
But it’s just one planet of uncountably many, and we don’t just live on a planet, we live in a solar system, a galaxy, a universe. In fact, while there’s an implicit recognition of this in the worship of the sun by the renewable energy types, they’re insufficiently open minded about the use of the rest of the system as a source of resources whose harvesting would be much gentler on the planet than mining them here, if it could be done cost effectively.
I’d like to see Earth Day used as a platform to focus a lot more attention on the environmental benefits that space technology has brought us over the past half century, from data gathering on deforestation and pollution, communications that allow less business travel and more telecommuting, to space-based navigation that saves fuel and lives. I’d also like to see consideration of the even greater future potential for saving the planet via space.
I actually do share the goal of the anti-humans of wanting to reduce the environmental burden of humanity on the planet, and I don’t even necessarily object to the goal of reducing the terrestrial population, as long as we can dramatically increase the extraterrestrial human population, because I’m one of those people who think that human minds are the ultimate resource, and that you can’t have too many of them. But the way to achieve that goal is to open up space, not to simply reduce the human population on earth, by whatever means necessary (and many of these folks think that end will justify any means).
Back in the seventies, many of the L-5ers were hippies who recognized the peaceful potential of space colonization to gently depopulate the earth and make it into a giant natural park, with the vast bulk of humanity living and producing off planet the wealth, via industrial-intensive processes, that would make such a thing affordable. I wasn’t a hippy, but I thought then, and still think, that a wonderful ultimate goal.
But the means to achieve it are not more constraints and taxes on current energy use, or population. It is to deploy technologies that can actually achieve the goal — nuclear, molecular manufacturing, fusion (if we can do it), and low-cost space access, which might eventually make space solar power and extraction of other extraterrestrial resources for use on earth economically feasible.
Golda Meir once said that there would be peace in the Middle East when the Arabs started to love their children more than they hated the Jews. Similarly, the planet will be saved when many of the watermelons who claim to care for it start to love it more than they hate humans, freedom, individualism and technology.
[Thursday morning update]
Last week the Environmental Protection Agency did bravely move forward by finding that things like smokestacks and breathing — or anything related to greenhouse gases — endanger the public health and welfare. And since the EPA can now regulate CO2, it can have a say in nearly everything we do with little regard for silly distractions like economic tradeoffs…
…What’s worse than the EPA grabbing power over CO2? Well, leading Luddite and Congressman Henry Waxman is worse. His proposal sets carbon reduction goals of 20 percent by 2020, 42 percent by 2030 and 83 percent by 2050, and, with cap-and-trade, effectively nationalizes energy production.
This incremental destruction of prosperity is probably going to have to be modified as soon as citizens get a taste of reality. But how could any reasonable or responsible legislator suggest an 83 percent cut in emissions without any practical or wide-scale alternative to replace it, or any plan to pay for it all?
Well, that assumes that Henry Waxman is reasonable or responsible, when the available evidence indicates otherwise.
[Bumped]
Defending The EPA
Jonathan Adler thinks they have no choice:
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.
I’m perfectly happy to blame Congress for it.
Confidence Building
Appropriately frightened CEOs are hampering the recovery:
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.”
Just A Coinkydink, I’m Sure
The states with the highest unemployment rates just happen to also have high marginal tax rates, high unionization, or both.
Credit Where It’s Due
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.