If not, watch the following.
Wednesday, April 28, 2010
Bernanke says prompt action needed on deficit - Yahoo! News
EXCERPTS:
WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke said on Tuesday the country's budget deficit is on an unsustainable path and requires near-term action from policymakers to avoid dangerous outcomes.... "In the absence of further policy actions, the federal budget appears set to remain on an unsustainable path," Bernanke told the 18-member National Commission on Fiscal Responsibility and Reform.
Bernanke said the nation's heavy debt load risked putting upward pressure on interest rates.
"Given the significant costs and risks associated with a rapidly rising federal debt, our nation should soon put in place a credible plan for reducing deficits to sustainable levels over time," Bernanke said.
His remarks come as investors around the world fret over a worsening debt crisis in Greece, which forced the country last week to ask for financial aid from fellow European Union nations and the International Monetary Fund.
Not all economists agree the U.S. deficit is too large given the size of the economy and given the need for continued stimulus in the wake of the worst recession since the Great Depression.
COMMENT: Just to be sure you're clear on this: not all economists agree that there is "need for continued stimulus," or that there was a need for any stimulus to deal with the recession.
WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke said on Tuesday the country's budget deficit is on an unsustainable path and requires near-term action from policymakers to avoid dangerous outcomes.... "In the absence of further policy actions, the federal budget appears set to remain on an unsustainable path," Bernanke told the 18-member National Commission on Fiscal Responsibility and Reform.
Bernanke said the nation's heavy debt load risked putting upward pressure on interest rates.
"Given the significant costs and risks associated with a rapidly rising federal debt, our nation should soon put in place a credible plan for reducing deficits to sustainable levels over time," Bernanke said.
His remarks come as investors around the world fret over a worsening debt crisis in Greece, which forced the country last week to ask for financial aid from fellow European Union nations and the International Monetary Fund.
Not all economists agree the U.S. deficit is too large given the size of the economy and given the need for continued stimulus in the wake of the worst recession since the Great Depression.
COMMENT: Just to be sure you're clear on this: not all economists agree that there is "need for continued stimulus," or that there was a need for any stimulus to deal with the recession.
Tuesday, April 27, 2010
Crisis and Leviathan
From "How the West Grew Rich:"
Monday, April 26, 2010
Legislation to protect consumers from insurance company penalties - NOLA.com
EXCERPTS:
"BATON ROUGE -- Legislation that would bar insurance companies from assessing a penalty on policyholders who cancel their insurance before its expiration date has cleared a Senate committee and is now awaiting action by the full Senate.
"McPherson's bill also would require that within 30 days of a policyholder's cancellation, the company must rebate to the customer a pro-rated share of the premium. "I don't think people should be penalized if they find a better deal," Campbell said.
"BATON ROUGE -- Legislation that would bar insurance companies from assessing a penalty on policyholders who cancel their insurance before its expiration date has cleared a Senate committee and is now awaiting action by the full Senate.
"McPherson's bill also would require that within 30 days of a policyholder's cancellation, the company must rebate to the customer a pro-rated share of the premium. "I don't think people should be penalized if they find a better deal," Campbell said.
Saturday, April 24, 2010
Brussels decrees holidays are a human right - Times Online
EXCERPTS:
"AN overseas holiday used to be thought of as a reward for a year’s hard work. Now Brussels has declared that tourism is a human right and pensioners, youths and those too poor to afford it should have their travel subsidized by the taxpayer.
Under the scheme, British pensioners could be given cut-price trips to Spain, while Greek teenagers could be taken around disused mills in Manchester to experience the cultural diversity of Europe.
The idea for the subsidised tours is the brainchild of Antonio Tajani, the European Union commissioner for enterprise and industry, who was appointed by Silvio Berlusconi, the Italian prime minister.... Tajani, who unveiled his plan last week at a ministerial conference in Madrid, believes the days when holidays were a luxury have gone. “Travelling for tourism today is a right. The way we spend our holidays is a formidable indicator of our quality of life,” he said.
"AN overseas holiday used to be thought of as a reward for a year’s hard work. Now Brussels has declared that tourism is a human right and pensioners, youths and those too poor to afford it should have their travel subsidized by the taxpayer.
Under the scheme, British pensioners could be given cut-price trips to Spain, while Greek teenagers could be taken around disused mills in Manchester to experience the cultural diversity of Europe.
The idea for the subsidised tours is the brainchild of Antonio Tajani, the European Union commissioner for enterprise and industry, who was appointed by Silvio Berlusconi, the Italian prime minister.... Tajani, who unveiled his plan last week at a ministerial conference in Madrid, believes the days when holidays were a luxury have gone. “Travelling for tourism today is a right. The way we spend our holidays is a formidable indicator of our quality of life,” he said.
Netflix +100% vs. Blockbuster -60% - from CARPE DIEM
Want to understand how a market economy works? Consider Blockbuster Video, Netflix, Redbox, and streaming.
EXCERPTS:
"First, people decided they didn't want to drive to the movie theater. These days they aren't too keen on driving to the video store, either. In a sign of the times, Netflix saw its stock price top $100 a share Thursday after posting blowout earnings – the same week that another Blockbuster outlet closed, this one on 29th and K streets in Sacramento. Blockbuster and Hollywood Video are closing local outlets as nationally, both companies feel the heat from game changers like Netflix and Redbox, which rents movies for $1 a night out of vending machines in supermarkets.
"Brick and mortar video stores are under pressure from the online world, just like record stores and booksellers before them. We want to rent DVDs quickly by mail or pick them up at the supermarket. And that's if we bother handling a physical disc at all. Increasingly, we just stream movies on laptops and smart phones or download them right to our PlayStations or Xboxes, so we can watch them on our flat-panel TVs.
EXCERPTS:
"First, people decided they didn't want to drive to the movie theater. These days they aren't too keen on driving to the video store, either. In a sign of the times, Netflix saw its stock price top $100 a share Thursday after posting blowout earnings – the same week that another Blockbuster outlet closed, this one on 29th and K streets in Sacramento. Blockbuster and Hollywood Video are closing local outlets as nationally, both companies feel the heat from game changers like Netflix and Redbox, which rents movies for $1 a night out of vending machines in supermarkets.
"Brick and mortar video stores are under pressure from the online world, just like record stores and booksellers before them. We want to rent DVDs quickly by mail or pick them up at the supermarket. And that's if we bother handling a physical disc at all. Increasingly, we just stream movies on laptops and smart phones or download them right to our PlayStations or Xboxes, so we can watch them on our flat-panel TVs.
Capitalism vs. Capitalists - Jonah Goldberg, National Review Online
EXCERPTS:
"If by "capitalist" you mean someone who cares more about his own profit than yours; if you mean someone who cares more about providing for his family than providing for yours; if you mean someone who trusts that he is a better caretaker of his own interests and desires than a bureaucrat he's never met, often in a city he's never been to: then we are all capitalists. Because, by that standard, capitalism isn't some far-off theory about the allocation of capital; it is a commonsense description of what motivates pretty much all human beings everywhere....
The problem with socialism is socialism, because there are no socialists. Socialism is a system based upon an assumption about human nature that simply isn't true. I can design a perfect canine community in which dogs never chase squirrels or groom their nether regions in an indelicate manner. But the moment I take that idea from the drawing board to the real world, I will discover that I cannot get dogs to behave against their nature--at least not without inflicting a terrible amount of punishment. Likewise, it's easy to design a society that rewards each according to his need instead of his ability. The hard part is getting the crooked timber of humanity to yield to your vision.
"If by "capitalist" you mean someone who cares more about his own profit than yours; if you mean someone who cares more about providing for his family than providing for yours; if you mean someone who trusts that he is a better caretaker of his own interests and desires than a bureaucrat he's never met, often in a city he's never been to: then we are all capitalists. Because, by that standard, capitalism isn't some far-off theory about the allocation of capital; it is a commonsense description of what motivates pretty much all human beings everywhere....
The problem with socialism is socialism, because there are no socialists. Socialism is a system based upon an assumption about human nature that simply isn't true. I can design a perfect canine community in which dogs never chase squirrels or groom their nether regions in an indelicate manner. But the moment I take that idea from the drawing board to the real world, I will discover that I cannot get dogs to behave against their nature--at least not without inflicting a terrible amount of punishment. Likewise, it's easy to design a society that rewards each according to his need instead of his ability. The hard part is getting the crooked timber of humanity to yield to your vision.
Thursday, April 22, 2010
Flowering of Civilization - Cafehayek
How does a volcanic eruption in Iceland affect workers in Kenya, and at the same time demonstrate the benefits of global trade?
Monday, April 19, 2010
Volcano flight chaos leaves many passengers broke
EXCERPT:
APRIL 19, 2010
"SYDNEY (AP) - Andrew and Debbie Jackman of Britain spent more than two years saving up for their family vacation to Australia. They probably wish they'd saved a little longer.
On Friday, they found out their Qantas flight from Sydney to Britain had been canceled thanks to a volcano erupting in Iceland. So the Cambridge couple and their two teenage sons squeezed into a 150 Australian dollar ($138) hotel room to wait out the night. On Saturday, the hotel raised the price of the same room to AU$350 - simply because it could....
"I stayed in my hotel last night, but that was all my money," he said at the Narita International Airport, near Tokyo. "I think I'm going to stay here and sleep at the airport. Help me God."
"I stayed in my hotel last night, but that was all my money," he said at the Narita International Airport, near Tokyo. "I think I'm going to stay here and sleep at the airport. Help me God."
Nicolas Ribard, 29, from Avignon, France, was among about a dozen stranded tourists squatting on sleeping bags that Narita airport officials had lent them. He and three other friends had about 3,000 yen between them, and were surviving on airport-issued crackers, bottled water and coupons for one free shower a day.
Their earliest possible flight would be Taiwan's EVA Airways on May 12 - but only if they are willing to pay an extra 150 euros ($200). Otherwise, they have to wait until June, Ribard said.
"I am a little afraid that my pay will be docked," said Napier, 35. "I also have tutoring jobs during the week that usually supplement my salary. That will be gone. And even if I don't get my pay docked, all my days off will have to be charged as sick days."
Steeper-than-usual hotel prices is another passenger complaint. In Hong Kong, Busi Daniel, a 39-year-old French tourist, said he spent Sunday night in a hotel after his flight was canceled. But a huge jump in price meant he would be forced to sleep at the airport on Monday.
"Yesterday, we had a hotel room at 250 euros. At midday, it was 460 euros, and in the evening, the price was 800 euros for a room - we can't pay that," he said Monday as he waited at KLM Royal Dutch Airlines' counter in Hong Kong's airport.
The Jackmans spent hours pleading for mercy from the Novotel Sydney Brighton Beach after it raised the price of their room the second night.
Asked if the hotel was guilty of price-gouging, the hotel's general manager, Alan Burrows, said simply, "We dynamically price much like the airlines do, according to how many rooms we have to sell in the hotel."
Unlike many airlines, Qantas - Australia's largest carrier - has said it's been paying for stranded passengers' accommodations and providing meal vouchers. That was news to the Jackmans, who said airline representatives told them they were on their own.
On Monday, after spending three hours on hold with Qantas, the family trekked back to the airport (another AU$30 cab ride), and spoke to a customer service representative in person. It was only then, they said, that the airline offered to pay for a hotel room - for one night.
Saturday, April 17, 2010
A 90% Certainty Unemployment Rose. Or Fell - WSJ.com
EXCERPTS:
"The ranks of unemployed individuals grew by 134,000 last month from February, to 15 million, the Department of Labor's Bureau of Labor Statistics says. But it also is plausible, the agency says, that the number of unemployed rose by 500,000. Or, it could have fallen by 200,000.
In fact, at a time when high unemployment tops many people's worries about the economic recovery, the BLS can say only that it is 90% confident that the true change in the number of unemployed in March was somewhere between a drop of 243,000 and an increase of 511,000. In other words, it isn't even clear whether the number of unemployed rose or fell last month. The ranges are similarly broad for seven of the last 10 months—and for more than 75% of the time in the past decade.
This isn't a failing of government or of statisticians, say economists. Instead, it is the inevitable result of trying to measure small changes in a sprawling, complex economy. There is no doubt that the unemployment rate remains near the highest it has been in decades. But the government doesn't really know how much that rate has been changing from month to month, which can be vexing for economists attempting to identify signs of a nascent recovery.
The difficulty, says Patrick O'Keefe, director of economic research for accounting firm J.H. Cohn in Roseland, N.J., "is in providing the public a real-time sense of what is going on." He adds: "Most of the month-to-month changes are not only nonsignificant in a statistical way, but they are very often straddling zero, so you can't even infer the direction of the change has been accurately represented."
"The ranks of unemployed individuals grew by 134,000 last month from February, to 15 million, the Department of Labor's Bureau of Labor Statistics says. But it also is plausible, the agency says, that the number of unemployed rose by 500,000. Or, it could have fallen by 200,000.
In fact, at a time when high unemployment tops many people's worries about the economic recovery, the BLS can say only that it is 90% confident that the true change in the number of unemployed in March was somewhere between a drop of 243,000 and an increase of 511,000. In other words, it isn't even clear whether the number of unemployed rose or fell last month. The ranges are similarly broad for seven of the last 10 months—and for more than 75% of the time in the past decade.
This isn't a failing of government or of statisticians, say economists. Instead, it is the inevitable result of trying to measure small changes in a sprawling, complex economy. There is no doubt that the unemployment rate remains near the highest it has been in decades. But the government doesn't really know how much that rate has been changing from month to month, which can be vexing for economists attempting to identify signs of a nascent recovery.
The difficulty, says Patrick O'Keefe, director of economic research for accounting firm J.H. Cohn in Roseland, N.J., "is in providing the public a real-time sense of what is going on." He adds: "Most of the month-to-month changes are not only nonsignificant in a statistical way, but they are very often straddling zero, so you can't even infer the direction of the change has been accurately represented."
Friday, April 16, 2010
Fed Is Expected to Keep Rates Low for Now - WSJ.com
EXCERPTS:
"Federal Reserve officials are likely to end their policy meeting later this month by reiterating that they expect to keep interest rates low for "an extended period"—despite uneasiness among some policy makers that the words limit the Fed's flexibility as the economy improves.
It is expected that central-bank officials will use speeches and interviews to emphasize that their commitment to hold rates near zero depends largely on how the economy behaves.
More-robust consumer spending has made policy makers more confident that a sustainable recovery has taken hold. With unemployment still high, inflation slowing and stable expectations for future inflation, top officials now see little urgent need to start signaling they are near raising rates. But if the outlook shifts, they say their stance will move....
For the Fed, managing expectations is a delicate task, influenced greatly by the words it chooses. Since March 2009, the Fed has said in each post-meeting statement that it expected the economy's performance to justify keeping short-term rates near zero for "an extended period."
The phrase was chosen to encourage investors to buy long-term bonds, which would keep long-term interest rates low, by signaling the Fed wouldn't move for a long time.
Officials now want to make sure the phrase doesn't handcuff them. Some policy makers have become frustrated that the statement is sometimes interpreted as an ironclad commitment to keep rates low for at least an additional six months. But dropping the closely watched words is unappealing, because it could be misinterpreted as a signal that a rate increase is imminent. So officials are looking for ways to underscore that their plans are conditional.
"Everything depends on how the economy performs," James Bullard, president of the Federal Reserve Bank of St. Louis, said in New York on Thursday. Speaking more broadly last week about how the Fed's exit from easy money policies will unfold, Fed governor Daniel Tarullo said, "it seems to me neither necessary nor advisable to decide upon a single game plan that will be announced in advance and rigidly implemented after a decision is made to raise rates."
"Federal Reserve officials are likely to end their policy meeting later this month by reiterating that they expect to keep interest rates low for "an extended period"—despite uneasiness among some policy makers that the words limit the Fed's flexibility as the economy improves.
It is expected that central-bank officials will use speeches and interviews to emphasize that their commitment to hold rates near zero depends largely on how the economy behaves.
More-robust consumer spending has made policy makers more confident that a sustainable recovery has taken hold. With unemployment still high, inflation slowing and stable expectations for future inflation, top officials now see little urgent need to start signaling they are near raising rates. But if the outlook shifts, they say their stance will move....
For the Fed, managing expectations is a delicate task, influenced greatly by the words it chooses. Since March 2009, the Fed has said in each post-meeting statement that it expected the economy's performance to justify keeping short-term rates near zero for "an extended period."
The phrase was chosen to encourage investors to buy long-term bonds, which would keep long-term interest rates low, by signaling the Fed wouldn't move for a long time.
Officials now want to make sure the phrase doesn't handcuff them. Some policy makers have become frustrated that the statement is sometimes interpreted as an ironclad commitment to keep rates low for at least an additional six months. But dropping the closely watched words is unappealing, because it could be misinterpreted as a signal that a rate increase is imminent. So officials are looking for ways to underscore that their plans are conditional.
"Everything depends on how the economy performs," James Bullard, president of the Federal Reserve Bank of St. Louis, said in New York on Thursday. Speaking more broadly last week about how the Fed's exit from easy money policies will unfold, Fed governor Daniel Tarullo said, "it seems to me neither necessary nor advisable to decide upon a single game plan that will be announced in advance and rigidly implemented after a decision is made to raise rates."
Thursday, April 15, 2010
Wednesday, April 14, 2010
The Enormity of the Fiscal Gap - Tax Policy Center
Excerpts:
"A study we conducted at the Tax Policy Center found that Washington would have to raise [income] taxes by almost 40 percent to reduce -- not eliminate, just reduce -- the deficit to 3 percent of our GDP, the 2015 goal the Obama administration set in its 2011 budget. That tax boost would mean the lowest income tax rate would jump from 10 to nearly 14 percent, and the top rate from 35 to 48 percent.
What if we raised taxes only on families with couples making more than $250,000 a year and on individuals making more than $200,000? The top two income tax rates would have to more than double, with the top rate hitting almost 77 percent, to get the deficit down to 3 percent of GDP."
"A study we conducted at the Tax Policy Center found that Washington would have to raise [income] taxes by almost 40 percent to reduce -- not eliminate, just reduce -- the deficit to 3 percent of our GDP, the 2015 goal the Obama administration set in its 2011 budget. That tax boost would mean the lowest income tax rate would jump from 10 to nearly 14 percent, and the top rate from 35 to 48 percent.
What if we raised taxes only on families with couples making more than $250,000 a year and on individuals making more than $200,000? The top two income tax rates would have to more than double, with the top rate hitting almost 77 percent, to get the deficit down to 3 percent of GDP."
Did FDR End the Depression? - Burt Folsom: WSJ.com
EXCERPTS:
"'He got us out of the Great Depression.' That's probably the most frequent comment made about President Franklin Roosevelt, who died 65 years ago today. Every Democratic president from Truman to Obama has believed it, and each has used FDR's New Deal as a model for expanding the government.
It's a myth. FDR did not get us out of the Great Depression—not during the 1930s, and only in a limited sense during World War II..... The New Deal, by forcing taxes up and discouraging entrepreneurs from investing, probably did more harm than good."
"'He got us out of the Great Depression.' That's probably the most frequent comment made about President Franklin Roosevelt, who died 65 years ago today. Every Democratic president from Truman to Obama has believed it, and each has used FDR's New Deal as a model for expanding the government.
It's a myth. FDR did not get us out of the Great Depression—not during the 1930s, and only in a limited sense during World War II..... The New Deal, by forcing taxes up and discouraging entrepreneurs from investing, probably did more harm than good."
Thursday, April 8, 2010
Progressives can't get past the Knowledge Problem - Glenn Harlan Reynolds
EXCERPTS:
"Market mechanisms, like pricing, do a better job than planners because they incorporate what everyone knows indirectly through signals like price, without central planning.
Thus, no matter how deceptively simple and appealing command economy programs are, they are sure to trip up their operators, because the operators can't possibly be smart enough to make them work.....
There's good news and bad news .... The bad news is obvious: We're governed not just by people who do screw up constantly, but by people who can't help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or "better" rules will do any good: Incompetence is built into the system.
The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don't know what they're doing.
"Market mechanisms, like pricing, do a better job than planners because they incorporate what everyone knows indirectly through signals like price, without central planning.
Thus, no matter how deceptively simple and appealing command economy programs are, they are sure to trip up their operators, because the operators can't possibly be smart enough to make them work.....
There's good news and bad news .... The bad news is obvious: We're governed not just by people who do screw up constantly, but by people who can't help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or "better" rules will do any good: Incompetence is built into the system.
The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don't know what they're doing.
Wednesday, April 7, 2010
What's the Next 'Global Warming'? - Bret Stephens - WSJ.com
Bret Stephens: What's the Next 'Global Warming'? - WSJ.com
EXCERPT:
"So global warming is dead, nailed into its coffin one devastating disclosure, defection and re-evaluation at a time. Which means that pretty soon we're going to need another apocalyptic scare to take its place.... Something is going to have to take its place.
EXCERPT:
"So global warming is dead, nailed into its coffin one devastating disclosure, defection and re-evaluation at a time. Which means that pretty soon we're going to need another apocalyptic scare to take its place.... Something is going to have to take its place.
White House Rouses Workers to Seek Wage Rights - WSJ.com
EXCERPT:
"The Labor Department is encouraging low-wage and immigrant workers to turn in employers who are shortchanging their pay, as part of an expanding effort to enforce wage and hour rules.
Labor Secretary Hilda Solis launched a campaign last week called "We Can Help," asking workers in industries from construction to food services to notify the agency of suspected wage and hour violations.
The agency is also relying on tips from worker advocacy groups, widening efforts by the Obama administration to enlist activist groups to help with enforcement in a range of sectors from toy safety to distracted driving.
However, business groups are expressing concern that the Labor Department's effort will generate unfounded complaints... Mr. Johnson also questioned the appropriateness of the agency's partnerships. "Deputizing people outside the government who may have their own agendas is troublesome," he said.
"The Labor Department is encouraging low-wage and immigrant workers to turn in employers who are shortchanging their pay, as part of an expanding effort to enforce wage and hour rules.
Labor Secretary Hilda Solis launched a campaign last week called "We Can Help," asking workers in industries from construction to food services to notify the agency of suspected wage and hour violations.
The agency is also relying on tips from worker advocacy groups, widening efforts by the Obama administration to enlist activist groups to help with enforcement in a range of sectors from toy safety to distracted driving.
However, business groups are expressing concern that the Labor Department's effort will generate unfounded complaints... Mr. Johnson also questioned the appropriateness of the agency's partnerships. "Deputizing people outside the government who may have their own agendas is troublesome," he said.
Monday, April 5, 2010
Growth of Unpaid Internships May Be Illegal, Officials Say - NYTimes.com
Heny David Thoreau said something to the effect that if a man comes to your door and says "I'm from the government and I'm here to help," run away as fast as you can. If you don't understand why one would think that government attempts to help you may often in reality hurt you, read this article. It describes how government is "helping" young workers by protecting them from employers who offer unpaid internships.
Subscribe to:
Posts (Atom)