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Delicious free lunches for Judge Elihu Smails

Tuesday, November 3rd, 2009 | Politics | Permalink | No Comments |

or,

Cash for Duffers

Wall Street Journal - Cash for Clubbers: Congress’s fabulous golf cart stimulus:

We thought cash for clunkers was the ultimate waste of taxpayer money, but as usual we were too optimistic. Thanks to the federal tax credit to buy high-mileage cars that was part of President Obama’s stimulus plan, Uncle Sam is now paying Americans to buy that great necessity of modern life, the golf cart.

The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart. Even in states that don’t have their own tax rebate plans, the federal credit is generous enough to pay for half or even two-thirds of the average sticker price of a cart, which is typically in the range of $8,000 to $10,000. “The purchase of some models could be absolutely free,” Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year. “Is that about the coolest thing you’ve ever heard?”

Previously - Delicious free lunches for pro sports teams

Tags: free lunches, porkulus

2009 stimulus spending by country as a percent of GDP

Friday, August 7th, 2009 | Economics | Permalink | 2 Comments |

This really shows that this is a global slowdown, not just something specific to the U.S., though the U.S. meltdown is having secondary effects due to the sheer size of our economy.

That chart is from Eric Janzen’s latest piece, Debate: Are China’s stock and property markets dual bubbles that are about to pop? (subscription required). He’s not convinced they’re quite about to pop, but that they probably are at or near the top.

In summary:

The Fed will not raise interest rates to protect the dollar or before unemployment falls for six months or more, regardless of cost-push and supply crash inflation.

The dollar will rise in flight to safety response by global investors when China’s dual stock and property bubbles collapse in Q4 2009.

China is about where Japan was in late 1989 and the U.S. in early 2000, near the top of both stock market and housing bubbles, or at least close enough for the adventurous gambler to short it.

So China has its problems, too. That’s good only in the sense that the best thing going for the U.S. is that other countries may be more screwed up than us, which would allow us to preserve our position as the world’s reserve currency. It’s bad in that a crash in China could have unsettling results on the now-fragile U.S. economy.

Tags: china, eric janszen, porkulus

Did Obama’s stimulus plan destroy the chances for his healthcare plan?

Monday, June 22nd, 2009 | Health Care | Permalink | 1 Comment |

Obama’s health care plan faces rising cost estimates and declining support.

Public anxiety about red ink — muted during this winter’s debate over an economic stimulus package — has come roaring back, with a Gallup Poll showing deficits and spending as the only issues where more people disapprove of Obama’s performance than approve of it.

Megan McArdle asks, Is Comprehensive Health Care Reform Dead?

But two things are also clear: the Democrats overestimated the boost they’d get from both the crisis and Obama’s popularity. And they dissipated a hell of a lot of the money and political capital they’d now like to spend on the stimulus and the GM bailout. They got very carried away with visions of 1932.

But this is not 1932, and Obama is not FDR. FDR came into office with 20+% unemployment and a banking crisis that was wiping out peoples’ life savings every day. FDR also came into office with a trivial national debt, and a Federal government that consumed less than 4% of GDP. He had a lot of run room.

Tyler Cowne asks, Is the revolution over?:

I’d just like to repeat a simple question I asked at the beginning of the Obama administration: which would you rather have, the fiscal stimulus or $775 billion in public health programs? Even better, how about $300 billion in stimulus — the immediate stuff like aid to state governments — and $475 billion in public health programs?

And I don’t mean this post as a poke at Democrats in particular. Conservatives, libertarians, etc. all commit their own versions of this error, at least if they find their way to power. The basic mechanism is simply that policy advocates underestimate the opportunity costs of the measures they propose, as they tend to see those measures as more “win-win” than others are willing to believe.

Tags: obama, porkulus

Unemployment numbers worse than projected

Tuesday, May 12th, 2009 | Economics | Permalink | 27 Comments |

How much worse? This much worse.

The blue lines are Obama’s projected unemployment numbers with and without his $775 billion stimulus. The red triangles are actual employment numbers.

The actual numbers aren’t just worse than the rosy picture Obama painted for a world after his magical stimulus took effect. They’re worse even than the doomsday scenario he outlined if Congress didn’t pass his stimulus plan.

Tags: porkulus

The Top 10 Signs You Are Living in a Banana Republic

Friday, April 17th, 2009 | Misc | Permalink | 1 Comment |

The Top 10 Signs You Are Living in a Banana Republic:

5. The bankruptcy process has becomes a political process. If this is the worst economy since the great depression, why aren’t there more bankruptcies? When did bondholders–which own a risky asset class called, ahem, “bonds”–become a guaranteed non risk asset class? It is obvious that my college professors were mistaken in teaching that the only RISK FREE asset class was US GOVERNMENT DEBT SECURITIES. They are going to have to rewrite a ton of economics and corporate finance textbooks to include Bear Stearns bondholders and preferred stock holders, Fannie and Freddie bondholders, any bond or preferred instrument held by Bill Gross/PIMCO (the official fourth branch of the US govt.) and any bonds or preferred stocks of the too-politically-connected-to-fail group of financials including AIG, GS, MS, WFC, C, JPM, et al as part of the risk-free asset classes in 21st century American capitalism. And, maybe they should hold off publishing until June because GM and Chrysler debt and preferred holders may be on that list as well.

3. William Black, the former Chief Fraud Investigator at the Federal Home Lending Bank and Office of Thrift Supervision during the Savings and Loan scandal, calls the current bank stress tests ” A COMLETE SHAM.” The FHLB is a very big institution, with $1.3 trillion (with a T) in loans, and its Chief Fraud Investigator during the S&L scandal, says a pillar of Federal banking reform policy is “a complete sham.” A complete sham. In addition to comparing the stress tests of our nations’ financial system to a counterfeit, fraud, flimflam, ruse (is that emphatic enough for you America, or do I need naked women shooting you with lasers to make you pay attention? I know, I do. Can we get some graphics of naked ladies in here, please?) Mr. Black also called the stress test “a Potemkin model. Built to fool people.” Like many others, Black believes the “worst case scenario” used in the stress test don’t go far enough. Black also said, “There is no real purpose [of the stress test] other than to fool us. To make us chumps,” Black says. Noting policymakers have long stated the problem is a lack of confidence, Black says Treasury Secretary Tim Geithner is now essentially saying: “’If we lie and they believe us, all will be well.’ It’s Orwellian.” “The fact bank stocks have been rising since Geithner unveiled his plan is “bad news for taxpayers,” he says. “It’s the subsidy of all history.”

Tags: bailout, banks, porkulus

Veterans angry about Obama’s insurance proposal (UPDATED)

Monday, March 16th, 2009 | Health Care | Permalink | 6 Comments |

Obama wants private insurance companies to cover service-related injuries for military veterans. The American Legion is strongly opposed to the plan:

Commander Rehbein reiterated points made last week in testimony to both House and Senate Veterans’ Affairs Committees. It was stated then that The American Legion believes that the reimbursement plan would be inconsistent with the mandate that VA treat service-connected injuries and disabilities given that the United States government sends members of the armed forces into harm’s way, and not private insurance companies. The proposed requirement for these companies to reimburse the VA would not only be unfair, says the Legion, but would have an adverse impact on service-connected disabled veterans and their families. The Legion argues that, depending on the severity of the medical conditions involved, maximum insurance coverage limits could be reached through treatment of the veteran’s condition alone. That would leave the rest of the family without health care benefits. The Legion also points out that many health insurance companies require deductibles to be paid before any benefits are covered. Additionally, the Legion is concerned that private insurance premiums would be elevated to cover service-connected disabled veterans and their families, especially if the veterans are self-employed or employed in small businesses unable to negotiate more favorable across-the-board insurance policy pricing. The American Legion also believes that some employers, especially small businesses, would be reluctant to hire veterans with service-connected disabilities due to the negative impact their employment might have on obtaining and financing company health care benefits.

If Obama’s plan goes through many veterans will become uninsurable for pre-existing service-related injuries.

Hat tip to an email from Mark O’Dell.

UPDATE: Here’s candidate Barack Obama a week ago last year:

When soldiers return from fighting, they deserve nothing but the best in medical care, he said. More needs to be done, he said, to understand the effects of post traumatic stress disorder and traumatic brain injury on soldiers returning from war.

“We’ll have to keep our sacred trust with our veterans and fully fund the (Veterans Administration). We’ll have to look after our wounded warriors, whether they’re suffering from wounds seen or unseen,” he said.

Newsflash: Obama lied his ass off. Follow the link for then-Obama’s take on debts and deficits vs. now-Obama’s porkulus spending plan:

“Because of the Bush-McCain policies, our debt has ballooned. This is creating problems in our fragile economy. And that kind of debt also places an unfair burden on our children and grandchildren, who will have to repay it,” he said. “John McCain seems determined to carry out a third Bush term.”

Tags: deficit, obama, porkulus

Because Paul Allen needs bigger yachts

Friday, February 20th, 2009 | Politics | Permalink | 3 Comments |

Obama’s stimulus makes Paul Allen a billion dollars richer. If this was Bush we’d never hear the end of it.

In other “that was then this is now” news

If Obama ever said anything bad about NAFTA during the election he doesn’t remember it now.

Bush didn’t spend enough money on Katrina because he hated black people, but we’re not going to spend money on it, either.

Gitmo - what’s the big whoop? Nice place, actually.

China, your abuse of Tibet is intolerable, and we’ll take care of it the minute we fix the economic crisis, the global climate change crisis and the security crisis. I kid you not. Secretary of State Hillary Clinton actually said that.

Paying her first visit to Asia as the top US diplomat, Clinton said the United States would continue to press China on long-standing US concerns over human rights such as its rule over Tibet.

“But our pressing on those issues can’t interfere on the global economic crisis, the global climate change crisis and the security crisis,” Clinton told reporters in Seoul just before leaving for Beijing.

LATER: Amnesty International and Students for a Free Tibet aren’t happy with Clinton.

Tags: hillary, obama, porkulus

CBO: recession will end in second half of 2009

Thursday, February 19th, 2009 | Economics | Permalink | No Comments |

I’ve quoted CBO on other things to support my pessimism on the economy, so it’s only fair I should mention their optimism on this.

Gateway Pundit - CBO Predicts Recession Will End in 2009 Without Stimulus:

CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009, making it the longest recession since World War II. (The longest such recessions otherwise, the 1973–1974 and 1981–1982 recessions, both lasted 16 months. If the current recession were to continue beyond midyear, it would last at least 19 months.) It could also be the deepest recession during the postwar period: By CBO’s estimates, economic output over the next two years will average 6.8 percent below its potential—that is, the level of output that would be produced if the economy’s resources were fully employed (see Figure 1). This ecession, however, may not result in the highest unemployment rate. That rate, in CBO’s forecast, rises to 9.2 percent by early 2010 (up from a low of 4.4 percent at the end of 2006) but is still below the 10.8 percent rate seen near the end of the 1981–1982 recession.

I hope they’re right.

Tags: porkulus

Line item look at TN’s share of the stimulus

Thursday, February 19th, 2009 | East Tennessee, Economics | Permalink | 3 Comments |

Ken Marrero emails:

A local TV station’s media blog posted TN’s portion of the Stimulus package swag. I offer a quick line item by line item analysis. Short version? Of the $3.8 billion, $2.4 billion is spent on Medicare and Education - hardly immediate economic Stimulus. Of the remaining $1.4 billion, less than half would reasonably be considered stimulating spending, given the money stands a good chance of being spent in the Public Sector.

His full take here. (Link was bad before. Fixed!)

Tags: porkulus

History of U.S. financial stimulus:

Thursday, February 12th, 2009 | Economics | Permalink | 1 Comment |

fixing a problem that already fixed itself.

And here’s Reason’s interviews with economists on the stimulus.

Tags: porkulus

Weren’t you guys the fiscally responsible ones back when?

Wednesday, February 11th, 2009 | Politics | Permalink | No Comments |

We need a new Ross Perot to convince voters that enormous government deficits are a bad thing and not just when the other party is in power.

Hat tip to tgirsch.

Tags: deficit, iz funny cuz iz true, porkulus

That wily Nancy Pelosi and her unemployment charts

Tuesday, February 10th, 2009 | Economics | Permalink | 2 Comments |

You may have seen this chart from House Speaker Nancy Pelosi’s office, which makes the current job losses look unprecedentedly awful:

But as Jim Manzi notes, Pelosi’s chart is based on the number of jobs lost as opposed to per capita unemployment or some other measure that accounts for the increase in the U.S. workforce. Here’s the same data expressed as unemployment rate:

Using that chart the current recession - bad as it admittedly is - is within historical norms, which undercut claims that we need this unprecedented boondoggle of a so-called stimulus package.

The porkulus bill creates $2,600 of debt for every man, woman, and child in the United States. That’s on top of a U.S. 10 trillion dollar debt, plus a projected additional 1 trillion dollar deficit projected for 2009. Call your Congressmen and tell them what you don’t want to burden your family and future generations with this debt.

Previously

Tags: porkulus

CBO: Stimulus will hurt long-term GDP

Thursday, February 5th, 2009 | Economics | Permalink | No Comments |

Washington Times - CBO: Stimulus harmful over long-term:

President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010. The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent. CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.

In other news, the U.S. Treasury overpaid for bank stocks during the TARP bailout, paying about a third more than the stocks were worth.

Tags: porkulus