Wonderful news if he’s right. We won’t know for sure until the GDP figures come out for the third quarter. Or the fourth quarter, depending on when the growth started and how fast it is. But leading indicators have been looking good for some time, so Bernanke’s guess seems reasonable.
Just beware of any declarative statements that come out before the data do.
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Posted in Business Cycles, Economics, Predicting the Future
Tagged ben bernanke, gdp, recession, recovery
People are often surprised to hear how similar President Obama’s policies are to President Bush’s. They shouldn’t be. One may be a Republican and the other a Democrat, but make no mistake. Bush and Obama are two peas in a pod.
-Bush signed a $700 billion bank bailout bill. Obama continued the policy. And he extended it to other sectors, such as the automobile industry.
-Bush tried fiscal stimulus twice while in power. With some help from the Bush team, Obama oversaw the largest fiscal stimulus bill in history. There is occasional talk of another.
-Bush started two land wars in Asia. Obama could end them. Instead, he is committing more troops to Afghanistan.
-Bush oversaw Medicare part D, the largest expansion of government’s role in health care since 1965. Obama also would like to expand government’s health care presence.
-And now, we have the PATRIOT Act. The bill was perhaps the largest expansion of executive power in seventy years, and the Bush administration’s signature legislation. Now that Obama has inherited all these cool powers, turns out he likes the PATRIOT Act, too. So he wants to extend some of its expiring provisions.
Predictable. Still disappointing.
“Public spending is always a substitute for private spending, and that consequently it may well support one worker in place of another, but adds nothing to the lot of the working class as a whole.”
-Frederic Bastiat, Selected Essays on Political Economy, p. 16 (emphasis in original)
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Posted in Economics, Great Thinkers, Pith, Stimulus
Tagged bastiat, broken window fallacy, economic way of thinking, Economics, frederic bastiat, opportunity costs
Transitionland had a thoughtful response to my cri de coeur on Afghanistan yesterday. Among her recommendations for improving things:(1) Stop the air strikes that are killing civilians,
(2) Crack down on corrupt contractors to USAID,
(3) Stop supporting Afghan warlords who are homicidal and/or corrupt.So, after years of experimentation, we can now start applying these subtle, complex lessons:
(1) Don’t kill,
(2) Don’t steal,
(3) Don’t give aid to those who do.
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Posted in Development Economics, International, Pith
Tagged afghanistan, bill easterly, usaid, william easterly
In Jersey City, New Jersey, the school district is requiring students to “sanitize their hands when they walk into the class in the morning, before and after lunch, and after each restroom visit.” That’s a requirement. As in, not optional. The district will be providing hand sanitizers at a cost of about $100,000.
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Posted in Regulation of the Day
Tagged hand sanitizing, Regulation of the Day, schools
Consumers have been buying a lot of tires made in China lately. Naturally, U.S.-based tire manufacturers are upset at their competitors’ success. Fortunately, there are two ways for the aggrieved American firms to ease their troubled minds:
1: Make better tires for less money. Give consumers a reason to buy American tires rather than Chinese. Compete, in other words.
2: Don’t compete. Too much hard work. Instead, persuade some politicians to place a 35 percent protective tariff on competitors’ tires. Price them out of the market. Then keep making the same old tires that people don’t want. If the tariff is large enough, you may even be able to raise your prices, even without raising quality.
This is a choice between raising the bar and lowering it. Unfortunately, U.S. tire firms and allied politicians have chosen to lower it. China, by putting up its own barriers to retaliate, is lowering the bar even further.
The really audacious part is that tire tariff supporters think they are really helping the economy. Raising that bar. Saving American jobs!
There is something very unsettling about the notion that an American job is intrinsically more valuable than a Chinese job. We are all human beings, are we not?
This is an ugly, ugly mindset. And it is one that politicians and tire companies have explicitly adopted. The burden is on them to explain why they think people who live in one country are more deserving of economic opportunity than people who live in another.
Comments Off on Regulation of the Day 50: Tires from China
Posted in Economics, International, Regulation of the Day, Trade
Tagged antidumping, china, higher prices for consumers, international trade, protectionism, regulation, Regulation of the Day, Trade
As so often happens, Gene Healy hits a home run.
On the anniversary of 9/11, what’s clear is that, despite the cliche, September 11th didn’t “change everything.” In the wake of the attacks, various pundits proclaimed “the end of the age of irony” and the dawning of a new era of national unity in the service of government crusades at home and abroad. Eight years later, Americans go about their lives, waiting in restaurant lines, visiting our ”great destination spots,” enjoying themselves free from fear — with our patriotism undiminished for all that. And when we turn to politics, we’re still contentious, fractious, wonderfully irreverent toward politicians, and increasingly skeptical toward their grand plans. In other words, post-9/11 America looks a lot like pre-9/11 America. That’s something to be thankful for on the anniversary of a grim day.
Comments Off on Moving On
Posted in Executive Power, Political Animals, Security Theater
Tagged 9/11, 9/11 changed everything, Executive Power, gene healy, presidency, president, september 11
Over at CNN, John Feehery argues that it’s better not to heckle. I agree, but for different reasons.
Feehery’s line of thinking is that the office deserves respect. Holding one’s tongue is a matter of decorum. “The president is the commander-in-chief, the leader of the country, and in many unspoken ways treated as a king.”
Technically, the president is commander-in-chief of the armed forces, and of nothing else. The rest of his job consists of humbly executing the laws given him by the Constitution and the legislature. That’s why it’s called the executive branch.
Feehery, a partisan Republican, here manages to out-conservative Edmund Burke. Royal rhetoric pervades his piece – evidence of how far the presidency has strayed from its intended purpose. The cult of the presidency endures.
Don Boudreaux’s approach to the presidency is more realistic, if less romantic:
[T]he notion that the U.S. presidency is lofty or respectable in any ethically significant sense is ludicrous. As Saul Bellow said about politicians, “they’re a bunch of yo-yos. The presidency is now a cross between a popularity contest and a high school debate, with an encyclopedia of clichés the first prize.”
Hence the real reason to let the president have his say without being heckling him: politicians make themselves look bad far more effectively than any heckler could. He doesn’t need the help. Just take his ideas seriously:
-We can save money by spending $900,000,000,000.
-We can contain costs by isolating people from the costs they incur.
-The Medicare/Medicaid model works. Expand it.
Presidents are unremarkable creatures. Borne of much talent for campaigning and little for governing, more love for power than for principle, and the unyielding belief that they know best, presidents have the worst kind of hubris. This is perhaps their only regal trait.
President Bush thought he could win two simultaneous land wars in Asia, and use military might to build a new nation in Iraq. Hubris.
President Obama thinks he can run the auto, financial, and health care industries at the same time, all while controlling global climate patterns. Hubris.
Feehery is right that President Obama should not have been heckled. If not for the sheer harm his office causes, it would not merit the attention.
Comments Off on To Heckle the President, or Not?
Posted in Executive Power, Political Animals
Tagged burke, cnn, edmund burke, executive branch, heckle, hecklers, heckling, joe wilson, john feehery, monarchist, politicians, presidency, president, rep. joe wilson, royalist
The First Amendment famously reads, “Congress shall pass no law… abridging the freedom of speech, or of the press.”
Congress, ever sneaky, has looked very closely at the First Amendment’s wording. If they can’t pass laws abridging the freedom of speech or of the press, maybe they can pass laws abridging the freedom of speech and of the press.
I kid, of course. No lawyer in their right mind would use that argument in court. The real justifications for most speech and press-abridging laws — collectively known as campaign finance regulations — are actually much flimsier.
They mainly have to do with protecting politicians from criticism. For example, a group called Citizens United released a partisan documentary last year called Hillary: The Movie. Basically a feature-length missive against then-Sen. Hillary Clinton and her presidential candidacy, the FEC blocked the movie from pay-per-view television during the 2008 primary season.
The movie was effectively censored because corporations (and unions) are not allowed to engage in certain types of political speech when an election is near. Citizens United lists some corporations among its donors, and thus was not allowed to show the movie as widely as they would have liked.
Citizens United got upset about all this, naturally. So they sued. Their case made it to the Supreme Court last year. Unwilling to make too hasty a decision, the Court re-heard oral arguments yesterday. The early bets are that Citizens United will win a partial victory, though one never knows until the decision is actually handed down.
Had the movie not been about politics, it would have faced no such obstacles. Political speech is treated very differently from other types of speech these days. This is a troubling trend. At heart, campaign finance regulations are a roundabout way of saying: no criticizing candidates!
Perhaps the First Amendment is a bit wordy. “Congress shall pass no law” is quite enough.
Comments Off on Regulation of the Day 49: Political Speech
Posted in Free Speech, Law, Regulation of the Day
Tagged bcra, campaign finance, citizens united, congress, corporations, first amendment, Free Speech, freedom of speech, hilllary clinton, hilllary the movie, mccain-feingold, regulation, Regulation of the Day, regulations, the corporations
Inertia Wins! 
Do Corporations Have Human Rights?
Intel’s defense in its EU antitrust case has taken the surprising line that the company’s human rights were violated. Over at Real Clear Markets, CEI colleague Hans Bader and I take a closer look. We conclude that Intel actually has a pretty good argument.
Corporations have human rights because doing so greatly reduces transaction costs: “suppose your company wants to buy some computer chips from Intel. You could have each shareholder sign the sales contract – good luck finding them all – or you could treat Intel as a person with the right to sign a contract, and the obligation to honor it. To deal with one person or millions? That is why corporations have legal standing as individuals.”
In short: no corporate rights, no modern economy. No exaggeration. There is a reason why legal conventions emerge as they do, even if they appear strange at first glance.
Iain Murray was kind enough to point out to me that the idea of corporate human rights has very deep roots. The 18th-century legal scholar William Blackstone, in his revered analysis of the English common law, wrote that corporations have the right “[T]o sue or be sued,, implead or be impleaded, grant or receive, by its corporate name, and do all other acts as persons may.”*
*William Blackstone, Commentaries on the Laws of England, Volume 1: Of the Rights of Persons, (Chicago: University of Chicago Press, 1979 [1765]), p. 463.
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Posted in Antitrust, Economics, Law, Publications
Tagged Antitrust, cei, coase, commentaries on the laws of england, contract, contract law, eu, hans bader, human rights, iain murray, intel, ronald coase, transaction costs, william blackstone