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27 December 2008

There He Goes Again

President Bush's extension of a portion of the TARP money to automakers, besides being a really bad idea economically and a rather confusing move for a man who at least claimed at one point to trust free-markets (in word, at least, but never in deed), is also unconstitutional and yet another violation of his office and his oath.
Well, with less than a month to go in this disgrace upon American history, at least he's being consistent.

Cuba

A very good article in today's Wall Street Journal regarding the trade embargo against Cuba and the myths surrounding it, us and them that have endured.
I've always felt the embargo a bad idea and it is continued to the benefit of only the few and is a political distraction. Removing the embargo would not reward the Castro regime, it would benefit Americans generally, which is what our government is supposed to be concerned with ("promote the general welfare").
A happy side effect is that it would benefit Cubans generally.
As I've written before, I don't have a hell of a lot of hope in the Obama administration's concept of economics, especially as it relates to his vision of "social justice" and Americans' liberty, but rescinding this ineffective anachronism would be a great way to dispel at least some criticism.

23 December 2008

Quatitative Easing

A good clip on "Quantitative Easing" and what the Fed is hoping to do. Nod to the inimitable Greg Mankiw. There is something to this. I work in title insurance and have gotten more refi orders in the last week than I have in the previous month and a half.

video

Snow?

I was just listening to "Do They Know It's Chrsitmas" by Band Aid, and after a mere 28 years I was struck by the lyric: And there won't be snow in Africa this Christmastime.

Of course there won't. Not merely because the continent is mostly desert, but because it just turned summer. It would be like lamenting no snow for Independence Day.

Otherwise, I really do like the song. The great misfortune is that it begat USA for Africa and "We Are the World." P.J. O'Rourke wrote a hilarious piece on this orgasm of self-righteousness a while back. I hope to find the piece and update this post later. He decribes the performers as having "that self-satisfied look of toddlers on a pot."

12 December 2008

Glutton for Punishment

I thought Sean Penn was bad.

Then I had the misfortune of stumbling upon this dyspepsia-inducing person on msnbc



I had never heard of this woman before and I won't soon watch this show again, but just to recap...

Hoover did mishandle the Depression. His backing of Smoot-Hawley was a bad idea. His support of wage increases didn't help. His tax hikes were a bad idea.
In other words, when he decided to try government intervention, the Depression worsened.
But it took Roosevelt to make the Depression Great.
Keynes was right, in the short-term. Government spending, especially on things like roads and bridges, can spur growth and help people. This is one of the things I have no problem with in Obama's policies. And deficit spending on these projects can be helpful in the short-run and long-run, so long as the government isn't in severe deficit spending to begin with.
Negative government spending (revenue from taxes less than government spending) reduces productivity (GDP)*. Going into deficit spending when the government is running even or surpluses is fine, due to the money multiplier. But the multiplier isn't as effective when the government is in severe debt (and disagreement there?), and may lead to unforseen consequences as well.
Also it increases state and local dependency on the federal tete for things the feds have no business to be involved in.
It also furthers the paternalistic relationship between the state and the citizen, whereas the proper role of government is an instrument.
And no amount of history-revising, smarmy, cringe-inducing logorrhea can change that.

*=and raising taxes also decreases GDP, especially when things are slow--this is why Obama has, wisely, backed off his plan to increase taxes on the rich SOBs who've earned it (for now). In other words, government should collect exactly that which is needed to perfom its proper function, not stray or spend beyond that limit and then otherwise remain out of our lives. Wouldn't that be neat? Just to try...once.

10 December 2008

Naming Rights

I know the name SeanEBoy sucks and am thinking of changing it. I'm also considering opening it up for other (selected) bloggers.

Ideas, opinions, suggestions welcome.

The blog (for now) is open to all who wish to comment, even anonymously.

Crickets

It's been so quiet around here. Actually it got a little busy at work, which is nice. I also don't want to keep hashing over the same thing over and over and over again, especially since appears to be so in vain.
But here I go again.
The Treasury Department is considering giving new home buyers an interest rate of 4.5% to goose the home buying market and "stabilize" home prices.
This is a bad idea for several reasons, namely that a bank that is pressuerd to give an interest rate that low will lose money on the deal as inflation will swallow the nominal interst rate within a few years and leave them with a negative real interest rate.
"But wait!" you say. Most homeowners sell or refi within five years (I've also heard three or seven, but that doesn't matter). What policymakers rarely do (and almost never do correctly) is consider that monkeying around like this changes peoples incentives. If you have a locked interest rate of 4.5% you're not going to refi--or would be very hard pressed to do so. Also, all things equal, you would be less likely to sell. We have the incentive to purchase a home now counterbalanced by the incentive not to sell or refi in the future.
Further, with the banks realizing negative return on investment, what is to stop them from crying poor-mouth to the federal government and asking them to help them out of the mess that the government put them in? Of course under this scenario, I believe they would be entirely justified in doing so.
The Community Reinvestment Act, which did play at least some role in our current mess, is an example of what can happen when politicians seek political means and ends to economic activity. We have entered what appears to be a nasty cycle of moral hazzard. All, of course, in the name of "best intentions."
reason magazine has several great articles in its January issue that I will link to here when they become available.
One already is: here. It effectively cuts the argument that President Bush was some fan of limited government or regulation. The lack of regulation is not what caused our current problems.
Open markets are the most effective and efficient way to set prices.
Government efforts to help only make things worse. History is replete with examples, but FDR extending the Great Depression and Nixon making a disaster of the 70s through wage and price controls are just two examples that spring to mind.
Markets clear, government gums them up.

Earth

Frickin' beautiful.

01 December 2008

There is Bad, There is Awful

and there is Sean Penn. An otherwise talented actor who seemingly cannot be expected to have mature, adult-like thoughts crafted in that hollow 'neath his eyes. I haven't read this dreck all the way through and am not too proud to say that I don't think I can.
Some quick thoughts, starting with this:

Earlier that year, in August 2005, Pat Robertson, on his televised 700 Club,
actually voiced his will that the U.S. should assassinate a democratically
elected head of state in Hugo Chavez Frias of Venezuela.


Now, I'll grant you that Pat Robertson was a horse's ass of staggering proportions, but if you think for a second that Hugo Chavez Frias of Venezuela was democratically elected, I have a bridge in Brooklyn to sell you after I introduce some people I know that live under that dictatorial bastard.
I'll also grant that America's embargo of Cuba is foolish and misguided, not to mention unsuccessful. That doesn't change the fact that Castro is also a blood-thirsty, dictatorial thug. But to Penn he is grandfatherly.
He writes, "I'm enthusiastic about exploring socialism. Personal achievement. Well, in this case, I hope to achieve the reader's continued interest."
For amusement purposes only, I would hope. But before he writes, before he shares his enthusiasm for socialism, he should become more familiar with the economic, political and practical implications of such enthusiasm. Enthusiastic socialists in history have been Lenin, Stalin, Hitler, Mao and his buddy Castro. Where is the reconcilliation with these facts?
I agree that capitalism has its problems. I agree that the problem with capitalism is capitalists. But the problem with socialism is socialism. And I can't believe that at the beginning of the 21st century some people haven't gotten this.
I was drawn to this piece by this post by Mark Hemingway on the Corner. I dare you to read it and take it seriously:

From the sublime to the ridiculous, it was now 2am. I lit a cigarette, took a couple of drags, flicked it into the alley and entered the bar. Downstairs the music was loud. Some quasi-combo of house and salsa. Thump! Thump! Thump! The downbeats shook the floor and tickled my feet. I headed up the back stairs, and waiting for me at a table in the upper deck were the two contractors I had arranged to meet the night before. Full disclosure: I'm not a big "contractor" guy. I'd been jacked up by DynCorp-employed Iraqis on a dark night in a Baghdad alley, and slept beside Blackwater boys and their guns on a floor in the floods of New Orleans. It's just this little thing I have about apolitical military might for profit. Call it irksome. Call it what you will, but a source is a source. We exchanged greetings by way of grunts. I took a seat and ordered Johnny Walker Black. It had been years since I ordered Johnny Walker Black. Pathetically I might have wanted to be one of the boys for a moment. They ordered a bubbly water a piece, and it was on. I was Al Capone, m——-f——-, and they were a pair of Perrier pansy John Wayne's. "Whatcha got for me?"
Uninterestingly, they turned out to be a couple of gents, South African though
they were. In practice, their job in Venezuela was logistical. One, organized the patrolling of waterways by their company, contracted by the Venezuelan government to aid in drug interdiction. The other strategized jungle patrols on the Colombian border. We talked about a lot of things, and a lot of parts of the world, as I tend to do when indulging Johnny Walker Black. But here are the highlights: Neither one of them liked Chavez a bit. Whatever personal politics they might have had were far to the right of my peripheral vision. Chavez just wasn't their kind of fellow. But the jungle patrolled said straight out, "I'll tell you this about Chavez though. Of all the countries we've worked for, this government is by far, the most serious about drug interdiction." I said, "What's the bad news?" He said, "Chavez won't last a year." "What do you mean?" I said. "He's too radical. We've seen it before." "Seen what before? I said. "They'll kill him." "They?" I said. He reached across the table, took a sip of my Johnny Walker Black, smiled, and pointed directly at me, the Americano at the table.