The Wall Street Journal has a story about obstacles in the way of Democrat plans to tap the unused TARP money for an expansion of their slush funds.  Unfortunately for Dems, TARP was passed back when we thought 700 billion dollars was a significant sum, and the funds are restricted to the purpose of stabilizing the financial system.

Of course, the Democrats are going to give it the old SEIU try.  The Journal’s paragraph describing the President’s appeal is telling:

Much of the president’s presentation will be general and will focus on Washington’s obligation to help Main Street as well as Wall Street. The president is expected to outline ideas for job creation such as aiding cash-strapped state governments, using tax credits to spur home energy-efficiency improvements — the so-called cash-for-caulkers proposal — and offering employers a tax credit for new hiring.

“Ideas for job creation such as aiding cash-strapped state governments”? Yup, that’s always Number 1 on my list of ways to fire up the the engine of American entrepreneurialism.  Let’s make it possible for legislatures and governors in progressive states to maintain their bloated budgets.

As to the third item, why not just deliver a tax cut for small businesses?  Or address the real problem:  the uncertainty over the future costs of Obamacare and Cap and Tax.  No, I think a one-time tax credit that will do nothing toward the future costs of employment should do the trick.

Here’s a crazy idea: with the the $150 billion or so in remaining TARP funds, why don’t we do something like, oh I don’t know, pay down some of the deficit, instead of giving the dollars to these semi-crony job creation programs? Maybe I’m overly simplistic. But over the last year when I had incurred some ill-advised credit card debt, I took any leftover funds and windfalls and threw it right at my debt and paid that sucker off and then went to put myself on a better financial footing. Paying down/reducing the deficit is a win-win. You don’t incur more debt and with the State-of-the-Union coming around, Obama could actually pretend to the American people that he is fiscally responsible, even though he’s spending like a drunken sailor.

This report from ABC News is a bit unfair.  Yes, the administration’s report states that 30 jobs have been saved/created in Arizona’s 15th congressional district and … there are only eight districts in Arizona.  However, the reporter fails to note the profound impact that the creation of another seven congressional districts would have on the state’s economy.  That’s in addition to the eight districts saved by the stimulus plan.

Update:  Good news!  Congressman Obey (or Soros will fund a challenger in your primary) has discovered even more job creating potential in correcting the recovery.gov errors:

Rep. David Obey, D-Wisc, who chairs the powerful House appropriations Committee, issued a paper statement demanding that the recovery.gov Web site be updated.

“The inaccuracies on recovery.gov that have come to light are outrageous and the Administration owes itself, the Congress, and every American a commitment to work night and day to correct the ludicrous mistakes.”

“Night and day,” people.  That means two sets of employees.

No one can be genuinely shocked that the H1N1 vaccinations aren’t going “according to plan” (a total undersupply of the vaccine) nor should we be shocked at rent-seeking behavior of localities and others receiving doses of the vaccine and then essentially internalizing a benefit to themselves by giving it to people outside of the government-created “priority list.” It does surprise me that it is Wall-Street Bailed-Out companies doing this. (more…)

The Cash for Clunkers program cost approximately $24,000 per vehicle, according to an Edmunds.com analysis.   Edmunds used the sensible approach of asking not how many cars were sold, but how many were sold that would not have been sold otherwise (based on the sales volume of models not eligible for the program in the same period).

Twenty-four grand apiece in order to send a bunch of perfectly functional vehicles to the shredder.  Might be nice to have those available when you’re unemployed and can no longer afford the Lexus.  Why not just send those who apply a new MINI Cooper?  It would be cheaper.

From Michael Moore’s “Capitalism: A Love Story” website:

For Those of You on Your Way to Church This Morning …a note from Michael Moore

Friends,

I’d like to have a word with those of you who call yourselves Christians (Muslims, Jews, Buddhists, Bill Maherists, etc. can read along, too, as much of what I have to say, I’m sure, can be applied to your own spiritual/ethical values).

In my new film I speak for the first time in one of my movies about my own spiritual beliefs. I have always believed that one’s religious leanings are deeply personal and should be kept private. After all, we’ve heard enough yammerin’ in the past three decades about how one should “behave,” and I have to say I’m pretty burned out on pieties and platitudes considering we are a violent nation who invades other countries and punishes our own for having the audacity to fall on hard times.

I’m also against any proselytizing; I certainly don’t want you to join anything I belong to. Also, as a Catholic, I have much to say about the Church as an institution, but I’ll leave that for another day (or movie).

Amidst all the Wall Street bad guys and corrupt members of Congress exposed in “Capitalism: A Love Story,” I pose a simple question in the movie: “Is capitalism a sin?”
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From Powerline.  Just devastating.  Here’s a sample:

The upshot? The Danes retain the title of world’s most prolific wind producer, and President Obama cites their experience as a path to be followed. The cost? Danish ratepayers are forced to pay the highest utility rates in Europe. And the American people are led to believe that, though wind may only provide a little more than one percent of our electricity now, reaching a 20 percent platform – as the Danes have allegedly done – will come at no cost, with no jobs lost and no externalities to consider.

Speaking of jobs, the report also pulls back the curtain on the wind power industry’s near-complete dependence on taxpayer subsidies to support the fairly modest workforce it presently maintains. Just as in Spain, where per-job taxpayer subsidies for so-called “green jobs” exceeds $1,000,000 per worker in some cases, wind-related jobs in Denmark on average are subsidized at a rate of 175 to 250 percent above the average pay per worker. All told, each new wind job created by the government costs Danish taxpayers between 600,000-900,000 krone a year, roughly equivalent to $90,000-$140,000 USD.

My small contribution to the discussion on the importance of the entrepreneur in a family-centered economy.

In his masterly new encyclical, Caritas in Veritate, Pope Benedict repeatedly disclaims any authority to speak on technical aspects of economics or politics. “The Church does not have technical solutions to offer and does not claim ‘to interfere in any way in the politics of States.” CV 9; see also CV 16 (“If development were concerned with merely technical aspects of human life, and not with the meaning of man’s pilgrimage through history in company with his fellow human beings, nor with identifying the goal of that journey, then the Church would not be entitled to speak on it.”) (more…)

Although published during the 2008 presidential campaign, Michael Bauman’s essay on government bailouts is probably more relevant now than it was then. Mike, as some of you know, is a professor of theology and culture at Hillsdale College. And, like yours truly, earned his Ph.D. from Fordham University in New York City. Here are some excerpts:
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Yesterday’s New York Times contained an op-ed by David Leonhardt responding to the criticism that Obama’s health care proposals would lead to rationing of health care:

[R]ationing is an inescapable part of economic life. It is the process of allocating scarce resources. Even in the United States, the richest society in human history, we are constantly rationing. We ration spots in good public high schools. We ration lakefront homes. We ration the best cuts of steak and wild-caught salmon.

Health care, I realize, seems as if it should be different. But it isn’t. Already, we cannot afford every form of medical care that we might like. So we ration.

Mr. Leonhardt’s problem here is that he falsely equates rationing with economizing. In the case of rationing, distribution of a particular good is limited by third parties according to some general formula or central plan. Economizing, by contrast, involves a person allocating their own limited resources in the way that seems best to them.

While both rationing and economizing can be used to keep health care costs under control, economizing is preferable to rationing for a couple of reasons. First, as I’ve noted previously, economizing has been shown in a variety of contexts to bring prices down over time, as producers have the incentive to appeal to the economizer by cutting costs and lowering prices. Rationing, by contrast, limits costs not by reducing the cost of any particular medical treatment or procedure, but by limiting the overall number of procedures performed. (more…)

This week’s EconTalk podcast features Charles Platt, a journalist who “went undercover” as a Wal-Mart employee to see what all the fuss was about. It so happens that I was the catalyst behind the podcast, which is a geeky thing to be excited about, but there you have it.

The discussion focused a lot on the degree of autonomy and authority that Wal-Mart employees had. Every employee, for example, not only has access to a wealth of information regarding item costs, profit margins, etc., but any employee has the authority to lower prices on particular items at their discretion. Individual departments also had a high degree of autonomy:

My amiable, laid-back department supervisor had been doing this kind of thing for 15 years. When I asked him why, he took a moment to process the question. He had to think back to other employers he’d worked for in the distant past. None of them, he said, had treated him so well.

What exactly did he mean by that?

His answer lay in the structure of the store. “It’s deceptive, because Wal-Mart isn’t divided into separate stores like a mall,” he said. “But really, that’s how it works. Each section is separate. This is – my pet store! No one comes here and tells me how to run it. I could go for weeks without a supervisor asking any questions.” Here was the unseen, unreported side of the corporate behemoth. Big as it was, it was smart enough to give employees a feeling of autonomy.

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Since the subject is health care, perhaps a medical metaphor is appropriate: if we want to cure what ails the American health care system, it is vital that we begin with a proper diagnosis of the problem. Unless we can correct identify what the trouble with the current system is, any attempt to fix things is liable to only make matters worse. Which is why I found this article by the Kaiser Family Foundation on the differences between experts’ and the public’s views on health care rather distressing:

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Over at First Things, Nick Baldock has up an article on what Dorothy Sayers has to teach us about the current financial crisis. Sayers was, of course, a famed mystery writer of no little skill. Brilliance in one arena, however, does not necessarily imply competence in other arenas, and unfortunately much of the advice Baldock offers on Sayers’ behalf seems to be based on confused economic thinking.

Speaking of the financial crisis, Baldock begins by asserting that

When the underlying motive of society is economic, when humanity is devalued, the result of this sin will be judgement. One reaped what one had sown; on a larger scale, the Second World War was a manifestation of the same universal truth.

Baldock then goes on to quote Sayers on the sinfulness of the modern economic system:

“Whether or not it is desirable to keep up this fearful whirligig of industrial finance based on gluttonous consumption,” she asserted, “it could not be kept up for a minute without the co-operative gluttony of the consumer.” Sayers would have agreed that the housing meltdown was, at base, a moral failure. The belief that it was not merely reasonable, but virtuous, to want that which you could not afford would have struck her as preposterous as well as sinful.

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I’ve got a new commentary up with my favorite Catholico-Evangelical-Hayekian(!) think tank, the Acton Institute. Here’s a clip:

Ronald Reagan gave birth to a long boom when he successfully repudiated the Keynesian economics and punitive marginal taxation that had come to characterize the American approach to running the economy. By doing so, he restored prosperity to a nation mired in the twin crises of unemployment and inflation and wondering whether the presidency was simply too big for one man. His formula of stimulating the economy through tax cuts rather than government distribution of centrally-confiscated dollars fueled increases in American productivity and thus provided the nation with a basis for real wealth generation. (more…)

It’s such a simple concept, but difficult to drive home — you cannot simply impose a costly mandate on society and claim that the jobs created to deal with the mandate will foster greater economic growth.

As Ronald Bailey complains: “Proponents need to stop pretending cap-and-trade will cost nothing and create tons of jobs.”

I think the problem here, as with so many other regulatory issues, is that nobody fully understands the economy and it’s a complex beast. There are many factors affecting the economy, which tends to be cyclical, and so messing around with various regulations does not have an obvious and direct effect on economic growth.  In two years, we could pass cap and trade, enact draconian CAFE standards and burn Bill Gates at the stake for having too much money, and the the economy still might be chugging along at a good tick.

However, the economy wouldn’t be doing as well as it could, or should, be doing. Costly new regulations effectively change the baseline, so while the economy would still go through highs and lows, you would be cutting growth overall.

And then, before you know it, you’re Europe.  That’s why I shudder when I hear the phrase “Green Jobs.”

I understand that urge of some on the left side of the spectrum to side with the underdog, which is an attribute common to liberalism. It’s not entirely wrong, as compassion and empathy are generally positive, but it can easily turn into something more ugly.

Which brings me to the following commentary by Ezra Klein, boy wonder blogger for the Washington Post, on the impact of the credit card reform legislation currently hurdling its way through Congress:

The credit card industry, in recent years, has developed something of a tiered model. Good customers are treated extremely well. There are rewards programs, favorable terms, and high limits. But those who don’t prove as assiduous about their bills, or slip up amidst their payments, fall into a second tier that’s as punishing and deceptive as the first tier is serene and straightforward. Hidden fees, unexpected rate increases, universal default, and all the rest. The result is that low income credit card holders effectively subsidize high income credit card holders. The financially illiterate are gamed so the financially literate can pay very low fees. Flattening that business model out a bit would make a lot of sense. It’s a feature of the new legislation, not a bug.

This is ridiculous. First of all, interchange fees paid by retailers (a small percentage of the sales price) easily cover the transaction costs and rewards programs of reliable credit card bill payers. Secondly, card holders who don’t pay their balances aren’t exactly a boon to credit card companies; credit card debt may be dischargeable in bankruptcy, and some cardholders will simply never pay in any event. Consequently, it is hardly a secret that credit card companies want more customers who pay their bills on time, not fewer.

Furthermore, Klein tries to paint this as a rich/poor issue, when really it isn’t. Although on balance wealthy cardholders are more likely to pay off their balances on time, there are wealthy people who nevertheless live beyond their means. Likewise, many lower income cardholders used their cards prudently and pay their bills reliably.

The real victims with this legislation are those who live within their means and pay balances on time, or in other words, responsible people. Class warriors like Klein want to make this a rich vs. poor argument, when it’s really nothing of the sort. It’s a matter of whether the rules will be changed to benefit the irresponsible at the expense of the responsible.

This is well worth watching, and passing on (keep in mind while watching that all dollars are inflation adjusted):

Barney Frank tries to humiliate a Harvard Law student who questioned Frank’s involvement in the financial crisis (video) and Frank, apparently, thinks he is above reproach.

Mr. Frank, if you find questions upsetting, perhaps you should seek a different line of work.

Let me get this straight. When the Sept. 11 attacks took place, Pres. Bush was pilloried for continuing to read to kindergarten kids and not shoulder-rolling into a waiting black SUV while simultaneously pulling two AK-47s out of his suit coat and screaming, “Come and get ya some, punks! Let’s do this!” (Google “bush goat kindergarten” for proof.)

But eight years later, with the economy subterranean and giants of industry teetering on the abyss, it’s perfectly fine for the sitting U.S. president to go on a late-night talk show for some yuk-yuks? And don’t you love how the Christian Science Monitor slugged this article, and then went on to get in some jabs in the body of the article, too? (more…)

"Fire? What Fire?"

There is an ongoing question as to whether Obama’s abject failure to even begin to deal with the economic crisis is due to incompetence (including the fact that the Dear Leader is apparently overwhelmed by the requirements of his first real job) or malevolence (in other words, as Doug Ross outlined in this post, he’s doing it on purpose).  Two bits of evidence from this morning’s web browsing add weight to the malice aforethought / mens rea position. (more…)

Obama: Not A Wartime President

Today’s New York Post is where I discovered the full magnitude of Warren Buffett’s devastating critique of Obama’s leadership – or lack thereof – during the current economic crisis.  While Buffett’s “the economy fell off a cliff” quote was widely reported, I had not previously seen Buffett’s repeated references to Pearl Harbor.  In his posting on this topic last night, the reliably astute Mickey Kaus says the MSM “wildly underplayed Obama supporter Warren Buffet’s criticism of the President on CNBC.”  I agree. (more…)

First Things online just published my thoughts on conservative Protestants and their attitude toward corporate behavior.

Here’s a clip:

Several months ago, I heard a story that forced me to give more careful thought to my views on the built-in morality of the market. A large airline on the brink of bankruptcy in 2002 asked employees to make substantial wage concessions. They agreed. The airline returned to profitability, and management acknowledged that it had the workers to thank, but in the subsequent years, instead of restoring the wage concessions, it awarded hundreds of millions of dollars in bonuses to executives.

When pressed by reporters, the airline’s spokesman said the bonuses were necessary to retain top managerial talent. Pilots and other airline personnel could not leave because the airlines’ seniority systems would require them to start over at a new company. In effect, the workers could not easily punish the airline for failing to pay them back, so it was in no hurry to do so.

The story jarred me. Somehow, I had never applied my Christian conception of a sinful world to corporate behavior. In hindsight I realize my faith should have cautioned me against too easily deferring to the idea of the sufficiency of the invisible hand to produce justice.

Now, judging from this short bit, I’m guessing some of you will think I’ve gone all lefty on you.  Not so.  Read the piece.  There is not a call for the slightest government action.  What I’m calling for is the exercise of moral suasion.  If we can protest when the convenience store decides to carry porn, we can also protest when an airline screws its employees.  Follow the link and see whether you agree.

First, we had the emergency spending bill which was justified as essential to save and create jobs even though the folks who drafted it admitted that it wasn’t guaranteed to create even a single new job.  Now, Obama wants to push us over the brink into certain fiscal disaster and ruin the health care system while he does it.

From the Washington Post describing a portion of President Obama’s budget:

Obama aims to make a “very substantial down payment” toward universal coverage by trimming tax breaks for the wealthy and squeezing payments to insurers, hospitals, doctors and drug manufacturers, a senior administration official said yesterday.

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…that is a LOT of money.

How wonderful the coming days, weeks, and months will be as we FINALLY find out what’s in this stimulus bill Turbacondunken. Seriously. I’m hoping for a small bailout of my student loans (actually, student loans must be getting bundled and traded like no one’s business: they’re a sure cash-flow producing commodity right now…). One of the problems with these so-called stimulus and bailout bills is, even if the money actually could do what the government thinks it could do, it has little chance of actually getting where it needs to go. Via Megan Mcardle comes this GREAT story discovered by Not Larry Sabato of a VA State Congressman Tommy Norment trying to divert the car bailout money from manufacturers to auto dealerships. And the best part about Mr. Norment? Yup, he owns a dealership: (more…)

Don’t miss Dr. Krauthammer today.

When gas prices spiked last year, I saw a bumper sticker that read, “When George W. Bush took office, gas was $1.40 a gallon.” (Or some such number. I may not have the exact figure the bumper sticker quoted.) Pres. Bush (man, as much as I wish Bush had been a real conservative, I’m still going to miss typing that for the next four years) and his administration were soundly excoriated for jacking up the price of gas to help his oil-bidness cronies. Because, as everybody knows, the president has a dial on his desk that controls gas prices. Sometimes, LBJ would let his grandkids spin the dial, just to keep them occupied while he ordered pants from Hagar. Service station attendants hated that, because they had to keep running out to the pumps to react to the changes. (more…)